Which of the Following Statements Is FALSE

question 101

Multiple Choice

Which of the following statements is FALSE?

• A) Other things being equal, society's overall well-being is reduced when a perfectly competitive industry is monopolized.
• B) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve,the monopolist offers a lower level of output for sale.
• C) The profit-maximizing monopolist will always produce only along the inelastic portion of the demand curve, whereas equilibrium in a perfectly competitive industry always occurs along the elastic portion of the demand curve.
• D) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve, the monopolist charges a higher price for its product than what would be charged in a perfectly competitive situation.

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Definitions:

Discounting

The procedure used to calculate the present value of future income, which is inversely related to both the interest rate and the amount of time that passes before the funds are received.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Discounting

The process of determining the present value of future cash flows by applying a particular interest rate; often used in investment and finance.

Present Value

The value today of a future amount of money or sequence of cash inflows, accounting for a defined rate of return.