**Understanding Monopoly Market Behavior**In a monopoly, unique market dynamics are expected. Consider the following scenarios when a single firm dominates the market:- **a. The firm to sell at a price above marginal cost** - Monopolies typically set prices higher than the marginal cost to maximize profits.- **b. The firm to have zero economic profit** - Monopolies often earn significant economic profits due to lack of competition, unlike firms in perfect competition which tend towards zero economic profit in the long run.- **c. The firm to face inelastic demand** - Monopolies might face inelastic demand, where consumers are less sensitive to price changes, allowing the firm to maintain higher prices.- **d. The firm to produce high output** - Monopolies generally produce lower output compared to competitive markets, as they restrict production to raise prices.- **e. The firm to have low marginal cost** - While not always the case, monopolies may achieve lower marginal costs due to economies of scale, but it is not a primary characteristic.**Note:** Changing to another topic will automatically save your current progress in understanding monopolistic market structures.

Answered: Image /qna-images/answer/00090b9d-a6a3-4397-8259-e827b7b07091.jpgDefinition of monopoly- A monopoly market is a market structure characterized by the profit maximizer, price setter, single seller in the market, price discrimination, and high barriers to entry. Sources of monopoly power include capital requirements, economies of scale, technological superiority, control of natural resources, legal barriers, no substitute goods, and deliberate actions. A monopolist faces an elastic demand curve. The profit-maximizing choice for the monopoly will be to produce at the level of quantity where marginal revenue (MR) is equal to marginal cost (MC). If the monopoly produces a lower quantity, then MR is greater than MC at those output levels, and the firm can make higher profits by expanding output. Thus, if a market is supplied by a monopoly, then we expect the firm to sell at price above its marginal cost. option A is the correct answer.

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If a market is supplied by a monopoly, then we expect... Oa. The firm to sell at a price above marginal cost Ob. The firm to have zero economic profit O. The firm to face inelastic demand Od. The firm to produce high output е. The firm to have low marginal cost

If a market is supplied by a monopoly, then we expect... Oa. The firm to sell at a price above marginal cost Ob. The firm to have zero economic profit O. The firm to face inelastic demand Od. The firm to produce high output е. The firm to have low marginal cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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