The marginal revenue of a monopolist falls below price because the firm
A. Has an upward-sloping marginal cost curve.
B. Confronts a downward-sloping demand curve.
C. Faces a market demand curve that is inelastic.
D. Is not limited by market demand.
Answer: B
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An economic forecast:
a. will always be true. b. is more reliable than a weather forecast. c. will never provide valuable information. d. should not be relied upon to predict economic events. e. is always based upon a Ceteris paribus condition.
A recession can be expected to reduce inflation in the economy if the recession is caused by a(n)
a. increase in aggregate demand. b. increase in aggregate supply. c. decrease in aggregate demand. d. decrease in aggregate supply.
In a given market, how are the equilibrium price and the market-clearing price related?
a. There is no relationship. b. They are the same price. c. The market-clearing price exceeds the equilibrium price. d. The equilibrium price exceeds the market-clearing price.
The Big Mac Index perfectly explains the relative size of economies.
a. true b. false