Which of the Following Is True of Monopoly but Not

question 22

Multiple Choice

Which of the following is true of monopoly but not true of perfect competition?

• A) Firms can potentially earn economic profits in the short run.
• B) Total revenue is the product of price times the quantity sold.
• C) Firms can potentially earn economic profits in the long run.
• D) A profit-maximizing firm will shut down if price falls below the average variable cost.

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Definitions:

Annually

Occurring once every year.

Income Summary Account

An account used in the closing process to summarize the period's revenues and expenses before transferring the net income or loss to retained earnings.

Owner's Capital Account

Represents the total equity or investment that the owner has in the business, including initial investment and subsequent profits or losses.

Balance

The amount of money or value remaining in an account after accounting for debits and credits.