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:

Direct Beneficiary

An individual or entity that is explicitly intended by the parties involved to benefit from a contract or agreement.

Credit Instrument

A document that evidences a debt and the promise of repayment, such as bonds, notes, or mortgages.

Transferor's Warranties

Guarantees made by a seller (transferor) to a buyer about the condition, legality, and ownership status of the goods or property being sold.

Presenter's Warranties

Guarantees made by the presenter of a negotiable instrument, such as a check, regarding its legitimacy and their authority to present it.