What is the relationship between price elasticity of demand and the monopolist's revenue?
a. marginal revenue is maximized where demand is unit elastic.
b. average revenue is maximized where demand is unit elastic.
c. marginal revenue is negative where demand is inelastic.
d. average revenue is negative where demand is inelastic.
e. marginal revenue is lowest where demand is unit elastic.
C
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The textbook refers to the following quotation from a Federal Reserve publication: "Trade is a win-win situation for all countries that participate
" But many firms and workers oppose free-trade policies and protests against globalization have become a regular occurrence at meetings of the World Trade Organization. If trade is a "win-win" situation, why is there strong opposition to free trade and globalization?
A firm is operating with an optimal combination of inputs. Suddenly the price of one input rises. The firm should
A. buy less of that input and more of the other input. B. change its input mix so that the marginal physical product of the input whose price has risen falls and the marginal physical product of the other input rises. C. buy less of whichever input now has the highest money price and more of the other input. D. reduce its output.
Refer to the graph above and assume that the areas of the boxes are the same. Consider a situation where price increases from P3 to P4. In this price range, demand is relatively:
A. inelastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A). B. elastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G). C. elastic because the loss in total revenue (areas E + F + G) is greater than the gain in total revenue (area A). D. inelastic because the loss in total revenue (area A) is greater than the gain in total revenue (areas E + F + G).
If the exchange rate between the United States and Portugal changes from $1 = 1 euro to $1 = 2 euros, then holding everything else constant, the price of U.S. goods in Portugal will decrease.
Answer the following statement true (T) or false (F)