Buying a Monopoly from the Existing Owner Does Not Ensure

question 468

Multiple Choice

Buying a monopoly from the existing owner does not ensure an economic profit because

• A) the market for monopolies is a monopoly.
• B) competition among buyers drives up the cost of buying the firm.
• C) profits equal zero in the long run anyway.
• D) of the deadweight loss triangle.

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Definitions:

Equipment Depreciation

The allocation of the cost of tangible assets over its useful life, reflecting wear and tear, obsolescence, or permanent decline in value.

Supervisory Expense

Costs associated with salaries and benefits for supervisory personnel overseeing production or services.

Activity-Based Costing

A pricing technique that identifies tasks within an organization and allocates the expense of each task to all goods and services based on their real usage.

Overhead Costs

Expenses not directly tied to the production of goods or services, such as rent, utilities, and office supplies.