When Barriers to Entry Are High, a Monopolist (Or Cartel)

question 254

Multiple Choice

When barriers to entry are high, a monopolist (or cartel) will often be able to increase their profits by

• A) expanding their output so they can increase their price.
• B) reducing their output so they can raise their price.
• C) expanding their output so they can lower their price.
• D) reducing their output so they can lower their price.

---

Definitions:

Credit Policies

Guidelines that set the criteria for extending credit to customers, including terms of payment and interest rates.

Aging Schedule

A table that shows the breakdown of accounts receivable into categories based on the length of time they have been outstanding.

Credit Policy

A credit policy is the set of guidelines that a company follows to determine the creditworthiness of customers and the terms of credit to offer.

Cash Balances

The amount of cash or cash equivalents that a company or an individual holds.