Which of the Following Is True Regarding Monopoly

question 59

Multiple Choice

Which of the following is true regarding monopoly?

• A) Monopolies produce too much and charge too much from the standpoint of efficiency.
• B) Monopolies usually are economically efficient because they have economic profits with which to work.
• C) Monopolies produce too little and charge too much from the standpoint of efficiency.
• D) Monopolies create an efficiency problem but are not associated with an equity problem.

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Definitions:

CCA Class

refers to the categorization of depreciable properties under the Capital Cost Allowance system for tax purposes in Canada, which determines the rate of depreciation.

Net Income

The final amount a company earns after taking out all costs and taxes from its revenue.

Equivalent Annual Cost

Equivalent Annual Cost is a financial analysis tool used to compare the cost efficiency of two or more investment options by transforming their costs into an annualized format.

Operating Cost

Expenses associated with the day-to-day functions of a business or organization, excluding costs related to production or acquisition of goods.