Which of the Following Is NOT True About a Monopoly

question 148

Multiple Choice

Which of the following is NOT true about a monopoly?

• A)The demand curve for a monopoly's product is perfectly elastic
• B)For any given quantity the price of the monopoly's product will exceed the marginal revenue from that amount.
• C)If the monopoly maximizes profit it will charge a price that exceeds marginal cost.
• D)It must adjust output until marginal revenue equals marginal cost to maximize profit.

Explain how marginal revenue and marginal cost influence a firm's production decisions to maximize profit.

Determine the conditions under which firms will enter or exit a competitive market.

Identify the role of market price in a competitive price-taker firm's decision-making process regarding output levels.

Understand the concept of price being driven to minimum average total cost in competitive markets due to characteristics like free entry and exit.

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Definitions:

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products, typically described as the 4Ps: Product, Price, Place, and Promotion.

Targeted Buyers

A specific group of consumers identified as potential purchasers of a product or service based on demographics or interests.

Technical Feasibility

Technical feasibility assesses whether a proposed project or system can be implemented with current technology and resources, ensuring it is practical from a technical standpoint.

New-product Development Process

A series of stages including ideation, design, development, and marketing that businesses follow to bring a new product to the market.