Monopolies Are Inefficient Because They

question 1

Multiple Choice

Monopolies are inefficient because they

• A) (i) and (ii) only
• B) (ii) and (iii) only
• C) (iii) only
• D) (i), (ii), and (iii)

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its earnings before interest and taxes (EBIT) to its interest expenses.

Equity Multiplier

A financial ratio that measures a company's total assets financed by its shareholders' equity, used to evaluate financial leverage.

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, indicating how much profit a company makes with its total sales.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.