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:

Legal Structure

The framework of laws and regulations that establish the legal identity of an entity, its governance, and its operational guidelines.

Treaty

A formal and binding agreement between sovereign states or international entities, often in written form, pertaining to international law.

Lease

A contract by which one party conveys land, property, services, or goods to another for a specified time, usually in return for a regular payment.

Consideration

The value (such as money, a promise, or a service) exchanged between parties in a contract, making the agreement legally binding.