One Problem Associated with a Monopoly Firm Is That It

question 272

Multiple Choice

One problem associated with a monopoly firm is that it

• A) produces too little output but also charges a low price.
• B) produces too much output and charges too low a price.
• C) restricts output and charges a relatively higher price than a purely competitive firm.
• D) is just as good as a purely competitive firm in terms of output and price.

---

Definitions:

Guns And Butter

A term used in economics to represent the trade-off between a nation's investment in defense and civilian goods.

Increasing Opportunity Cost

A situation where producing more of one good or service leads to a larger increase in foregone production of another good or service.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over time, typically measured as the percent rate of increase in real GDP.

Full Employment

An economic situation in which all available labor resources are being used in the most efficient way possible, often characterized by the absence of cyclical unemployment.