If the Average Total Cost Curve Is Always Above the Demand

question 16

Multiple Choice

If the average total cost curve is always above the demand curve for a monopolist, _____.

• A)the monopolist will be suffering from economic losses
• B)the monopolist will be facing higher competition as there will be increased entry of rival firms into the market
• C)the monopolist will be earning an economic profit
• D)the monopolist will be producing inefficiently
• E)the monopolist will be earning normal profit

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Definitions:

Incentives

Motivators or rewards designed to encourage specific actions or behaviors by individuals or organizations.

Alternatives

Different options or choices available in a given situation, offering different pathways to achieve an objective.

Subsidized

Financial support provided by a government or organization to reduce the cost of producing goods or services.

Natural Resources

Resources that occur naturally within environments and are not created by human effort, including water, minerals, and forests.