This Graph Shows the Cost and Revenue Curves Faced by a Monopoly

question 13

Multiple Choice

This graph shows the cost and revenue curves faced by a monopoly. According to the graph shown,if Q2 units are being produced,this monopolist:

• A) is earning negative profits.
• B) should cut back production to increase profits.
• C) is maximizing revenue.
• D) is maximizing profits.

---

Definitions:

Business Judgement Rule

A legal principle that protects corporate directors and officers when making business decisions, assuming they act in good faith and in the best interest of the corporation.

Officers

Individuals appointed by a company's board of directors who are responsible for managing the daily operations and executing the strategic plans of the corporation.

Directors

Individuals elected by shareholders to oversee and make policy decisions for a corporation, setting its strategic direction and ensuring governance.

Majority Vote

A decision-making process where the outcome is determined by more than half of the votes cast by a group.