In What Way Does the Profit-Maximization Problem for a Monopolist

question 118

Multiple Choice

In what way does the profit-maximization problem for a monopolist differ from that of a competitive firm

• A)A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost.
• B)A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at a point where average revenue exceeds marginal cost.
• C)For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output.
• D)For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit-maximizing monopolist.

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Definitions:

Absenteeism

The frequent absence of an employee from work without valid reasons, which can negatively impact business operations.

Personnel Turnover

The rate at which employees leave an organization and are replaced by new hires.

Management Skills

The abilities and competencies that enable an individual to manage, direct, and guide others in a business or organizational context to achieve set goals.

Job Involvement

The level of psychological identification or commitment a person has toward their job and its importance in their life.