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.

Acknowledge the unpredictability of entrepreneurial success based on personal characteristics alone.

Understand the process and importance of product development and pivoting in the business world.

Recognize the educational background and risk profile of typical entrepreneurs.

Understand the concepts of diversity and innovation in enhancing problem-solving within organizations.

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Definitions:

Sold Bonds

The action of issuing bonds to investors, raising capital by incurring long-term debt.

Long-Term Investment

A long-term investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate, and cash, held for more than one year.

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted from total revenue.

Dividends

Profit distributions by a corporation to its shareholders, usually as an earnings sharing.