Which of the Following Is True

question 125

Multiple Choice

Which of the following is true?

• A) A monopolist produces on the inelastic portion of its demand.
• B) A monopolist always earns an economic profit.
• C) The more inelastic the demand, the closer marginal revenue is to price.
• D) In the short run, a monopoly will shut down if P < AVC.

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Definitions:

Standard Hours

The expected amount of time required to complete a task or produce a unit of product under normal conditions.

Variable Manufacturing Overhead

Expenses that vary with the level of production output, such as utilities and materials used in manufacturing.

Direct Labor-Hours

The overall hours logged by employees actively involved in the manufacture of a product or the rendering of a service.

Labor Efficiency Variance

A measure used in budgeting and accounting to evaluate the difference between the actual hours worked and the standard hours expected to complete a task.