A Monopolist Has Decreasing Average Costs as Output Increases

question 36

Multiple Choice

A monopolist has decreasing average costs as output increases.If the monopolist sets price equal to average cost, it will

• A)produce too much output from the standpoint of efficiency.
• B)lose money.
• C)produce too little output from the standpoint of efficiency.
• D)maximize its profits.
• E)face excess demand.

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