7.
Which of the following statements is true of monopoly?
(a) A monopolist decides both the price and output to be sold
(b) A monopolist poses no barrier to entry of new firms
(c) A monopolist usually earns excess profit in the long run
(d) A monopolist produces at minimum average cost
Answers
Answer:
correct statement is (a)
Which of the following statements is true of monopoly?
(a) A monopolist decides both the price and output to be sold
(b) A monopolist poses no barrier to entry of new firms
(c) A monopolist usually earns excess profit in the long run
(d) A monopolist produces at minimum average cost
The correct answer is :
(a) A monopolist decides both the price and output to be sold
Explanation :
A monopolist establishes a monopoly on a market when there is no rival firm in its rivalry. In such a situation, the monopolist decides both the supply and demand of the market. He determines the price of the product and determines the production of that product because he has established a complete monopoly on the market. The monopolist fixes the price of the product according to his convenience and keeps on increasing or decreasing the production of that product according to his profit.
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