A Monopoly

question 167

Multiple Choice

A monopoly

• A) must determine the price it will charge.
• B) faces extensive competition from firms making close substitutes.
• C) cannot price discriminate because such a pricing strategy is illegal in the United States.
• D) has no control over the price it can charge.
• E) Both answers B and C are correct.

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Definitions:

Economies of Scale

Cost advantages a business obtains due to expansion, characteristically causing a decrease in fixed costs per unit of production.

Conglomerate Mergers

Conglomerate mergers involve companies from unrelated business activities or industries merging, often to diversify business operations and risk.

Market Share

The portion of a market controlled by a particular company or product.

Financial Results

The summary outcomes of a company's operations and activities, often presented in terms of income, revenue, profit, and loss.