Which One of the Following About a Monopoly Is False

question 103

Multiple Choice

Which one of the following about a monopoly is false?

• A)A monopoly could make profits in the long run.
• B)A monopoly could break even in the long run.
• C)A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly.
• D)A monopoly status could be temporary.

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Definitions:

Excess Demand

A situation where the quantity demanded of a good exceeds the quantity supplied at the current price.

Compensating Variation

Compensating variation is an economic concept that measures the amount of money one would need to reach their original level of utility after a price change or economic policy impact.

Price Increase

A rise in the cost of a good or service.

Optimal Bundle

The combination of goods and/or services that maximizes a consumer's satisfaction or utility, given their budget constraint.