As a Firm Moves from a Competitive Industry to a Monopoly

question 30

Multiple Choice

As a firm moves from a competitive industry to a monopoly:

• A)its profits fall.
• B)average revenue falls and profits rise.
• C)marginal costs rise and profits fall.
• D)its profits rise.

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Definitions:

Special Order

A one-time order that is not considered part of the company’s normal ongoing business.

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.

Discount

A reduction from the usual cost of something, often applied to encourage sales or provided for early payment.

Net Operating Income

A company's total earnings from its operations, excluding taxes and other non-operational expenses, indicating the profitability of core business activities.