Figure 15-4 Figure 15-4 Shows the Demand and Cost Curves for a and Cost

question 7

Multiple Choice

Figure 15-4

Figure 15-4 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-4.What is likely to happen to this monopoly in the long run if costs and demand stay the same?

• A)New firms will enter the market to eliminate its profits.
• B)It will expand its output to take advantage of economies of scale so as to further increase its profit.
• C)As long as there are entry barriers, this firm will continue to enjoy economic profits.
• D)It will be regulated by the government because of its excess profits.

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Definitions:

Winnings

The amount of money or prizes won in a game or competition.

Worth Today

The present value of an amount of money in relation to its value in the future, considering factors like inflation and interest rates.

Interest Rate

The percentage at which interest is charged or paid on borrowed or invested money, typically expressed annually.

Present Value

Today's equivalent value of a sum of money or series of payments expected in the future, considering a particular rate of return.