GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Marginal cost is rising
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Marginal cost is falling
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Marginal cost is remaining constant
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All of the above
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Detailed explanation-1: -“Equilibrium for the firm under perfect competition can only occur when the marginal cost of the firm is rising at or near equilibrium output.” Equilibrium under monopoly can occur whenever marginal costs are rising, falling a constant.
Detailed explanation-2: -The correct answer is b. A monopoly is in equilibrium when it achieves maximum profit. The profit-maximizing quantity occurs when the marginal revenue is equal to the marginal cost.
Detailed explanation-3: -The following conditions for the existence of a monopoly are analyzed: the control of a resource or input, increasing returns to scale, technological superiority, and government-created barriers. A monopoly is an industry controlled by the only producer of a good that has no close substitutes.