Which of the Following Statements Is True

question 82

Multiple Choice

Which of the following statements is true?

• A)If a tax is imposed on a product sold by a monopolist, the monopolist will maximise its profits by producing where marginal revenue equals marginal cost.
• B)A monopolist will always charge the highest possible price.
• C)If a tax is imposed on a product sold by a monopolist, the monopolist can increase its price to pass along the entire tax to consumers.
• D)Because a monopolist faces no competition, the demand for its product is perfectly inelastic.

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Definitions:

Partner

An individual or entity involved in a business partnership sharing profits, losses, and responsibilities.

Subchapter S Corporation

A form of corporation that meets specific Internal Revenue Code requirements and passes income, losses, deductions, and credits through to shareholders for federal tax purposes.

Alimony

Financial support paid by one ex-spouse to the other after divorce or separation, often mandated by the court.

Tax Ramifications

The effects or consequences that certain financial decisions or business transactions have on an individual's or entity's tax liability.