Which of the Following Statements Is Correct for a Monopolist

question 45

Multiple Choice

Which of the following statements is correct for a monopolist? i) The firm maximizes profits by equating marginal revenue with marginal cost.
Ii) The firm maximizes profits by equating price with marginal cost.
Iii) Demand equals marginal revenue.
Iv) Average revenue equals price.

• A) i), iii), and iv) only
• B) i) and iv) only
• C) i), ii), and iv) only
• D) i), ii), iii), and iv)

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Definitions:

Value-Weighted Index

An index in which each component is included in proportion to its market value, making larger companies account for a bigger portion of the index.

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.

Stocks

Shares of ownership in a company, entitling the shareholder to a portion of the company's profits and assets.

Repurchase Agreements

Short-term borrowing for dealers in government securities, where the dealer sells the securities to investors usually overnight and buys them back the following day at a slightly higher price.