A Price-Discriminating Monopoly

question 328

Multiple Choice

A price-discriminating monopoly

• A) sells a larger quantity than it would if it were a single-price monopoly.
• B) is illegal.
• C) cannot offer discounts.
• D) cannot control the price of its product.
• E) makes a smaller economic profit than it would if it were a single-price monopoly.

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Definitions:

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.

Times Interest Earned

A ratio that measures a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes by the interest expense.

Debt-To-Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Equity Multiplier

A financial leverage ratio that measures the portion of a company`s assets that are financed by its shareholders' equity.