If a Monopoly Is Faced with Competition from Foreign Multinational

question 15

Multiple Choice

If a monopoly is faced with competition from foreign multinational corporations or from potential new entrants, then it would probably

• A) raise price and reduce output.
• B) reduce price and raise output.
• C) start operating at the inelastic portion of its demand curve.
• D) increase production so that MR > MC.

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Definitions:

Knobby-Kneed Legs

Legs with pronounced, bony protrusions at the knee, often noticeable and sometimes associated with thinness or a lack of muscular coverage.

Bony Horns

Hard, permanent projections made of bone and covered in a layer of keratin that are found on the heads of various animals.

Giraffe

A tall mammal native to Africa, known for its long neck, which enables it to access leaves and buds in the tops of trees.

Fine China

High-quality porcelain tableware that is often used for special occasions and is valued for its beauty and durability.