All of the Following Except One Are Reasons Why Unregulated

question 10

Multiple Choice

All of the following except one are reasons why unregulated monopolies may be undesirable? Which is the exception?

• A)Monopolies are guaranteed to make economic profits in the long run.
• B)Monopolies are productively inefficient.
• C)Monopolies are allocatively inefficient.
• D)The existence of monopolies may lead to a more unequal distribution of income and wealth.
• E)Monopolists produce below capacity output.

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Definitions:

Capital Intensity Ratio

A financial metric that measures the amount of assets needed per dollar of sales; higher ratios indicate a greater investment in assets to generate sales.

Capital Intensity Ratio

A measure of a company's investment in physical assets relative to its labor force, indicating the extent to which a firm's operations are automated or labor-intensive.

Operating Capacity

The maximum output that a business can produce in a given period under normal conditions, influenced by its resources and operational constraints.

Notes Payable

Short-term or long-term liabilities in the form of written promises to pay a specified amount with interest by a certain date.