A Reduction in a Monopolist's Fixed Costs Would

question 568

Multiple Choice

A reduction in a monopolist's fixed costs would

• A)decrease the profit-maximizing price and increase the profit-maximizing quantity produced.
• B)increase the profit-maximizing price and decrease the profit-maximizing quantity produced.
• C)not effect the profit-maximizing price or quantity.
• D)possibly increase, decrease or not effect profit-maximizing price and quantity, depending on the elasticity of demand.

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Definitions:

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Sole Proprietorship

A sole proprietorship is a type of unincorporated business owned and operated by one individual, with no distinction between the business and the owner for legal and tax purposes.

Partnership

A legal business relationship between two or more individuals who share management and profits or losses of the business.

Schedule E

A financial document utilized for declaring earnings and deficits from sources such as rental real estate, royalties, partnership entities, S corporations, estates, and trusts.