A profit-maximising monopoly earns abnormal profit and chooses to reinvest part of that profit to raise its capital stock. What outcomes are most likely to follow from this change?
- Aproductive efficiency improves; dynamic efficiency improves; allocative efficiency improves
- Bproductive efficiency improves; dynamic efficiency improves; allocative efficiency unchanged
- Cproductive efficiency unchanged; dynamic efficiency unchanged; allocative efficiency improves
- Dproductive efficiency improves; dynamic efficiency unchanged; allocative efficiency unchanged