How does a monopolist's marginal revenue change as output increases? Why?
What will be an ideal response?
As output increases, a firm must lower its price to sell additional units of the good. So the firm's marginal revenue from selling an additional unit of output decreases with output.
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In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person
A) decreased from $125,500 to $28,750. B) increased by about 118 percent. C) increased from $11,500 to $12,550. D) decreased by 9 percent. E) increased by over 300 percent.
Sue's Surfboards is the sole renter of surfboards on Big Wave Island. If marginal revenue is positive at the number of surfboard rentals made each hour, then Sue's Surfboards
A) must face an elastic demand for surfboard rentals. B) must face an inelastic demand for surfboard rentals. C) can increase its total revenue by increasing the price of rentals. D) must face a unit elastic demand for surfboard rentals.
Current thinking on the Phillips curve suggests that it would be best for policy makers to: a. focus on controlling unemployment. b. stimulate permanent shifts in aggregate supply
c. focus on controlling inflation. d. stimulate permanent shifts in aggregate demand. e. develop a two-pronged policy to control both unemployment and inflation.
Company A manufactures a single automotive component. It had total revenue of $100,000 and an economic profit of $20,000 . What is the price of the component it manufactures?
a. ($100,000/quantity sold). b. ($100,000/quantity produced). c. ($100,000/quantity sold) ? average cost of the product d. ($100,000/quantity produced) ? average cost of the product