The most profitable price for a monopolist is
A) the highest price a consumer is willing to pay for the monopolist's product.
B) the price at which demand is unit elastic.
C) a price that maximizes the quantity sold.
D) found where the profit-maximizing quantity hits the demand curve.
Answer: D
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Predatory pricing occurs when a firm sells
A) above cost to any customers who have no good alternative. B) above cost to low-income customers who have no good alternative. C) at whatever prices the market will bear. D) below cost in order to eliminate competitors. E) only to customers who agree to rebate a portion of the price.
A theory of saving is necessarily a theory of consumption, because ________
A) by definition, any unit of disposable income that is not a consumption expenditure is a unit of saving B) consumption decisions are made after saving has occurred C) private saving is equal to private investment D) the goal of consumption choices is to achieve the desired level of savings
The textbook discusses the carpet industry situated in the southeastern U.S., and the authors indicate that smaller carpet mills have ________ returns to scale while larger mills have ________ returns to scale
A) increasing, decreasing B) increasing, constant C) constant, decreasing D) constant, increasing
Often the pricing of one product can adversely affect the revenue earned from another produced by the same firm. This is possible if
A) the firm can separate customers into separate markets. B) the firm can exploit the different elasticities of different groups of consumers. C) the firm cannot separate customers into separate markets. D) none of these choices.