A monopolist wishing to increase its profit has just discovered that lowering its price and selling more output yielded the desired result. Profit increased. Based on this, we can conclude that the cost of the additional production is
A. greater than the revenue from the additional production.
B. less than the revenue from the additional production.
C. precisely equal to the revenue from the additional production.
D. there is no way to answer this because you have not given us the marginal revenue and marginal cost data.
Answer: B
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Refer to the figure above. When the demand curve for flash drives is D and the supply curve of flash drives is S1, what is the shortage in the market if the price is $4?
A) 0 units B) 10 units C) 20 units D) 40 units
A 10 percent increase in income has caused a 5 percent decrease in the quantity demanded. The income elasticity is
A) 0.5. B) -0.5. C) 2.0. D) -2.0.
The textbook defines a "large" business as having assets in excess of
A) $50 million. B) $150 million. C) $500 million. D) $1 billion.
The marginal propensity to consume (MPC) is
a. the change in consumption divided by the change in disposable income b. total consumption divided by total disposable income c. the change in disposable income divided by the change in consumption d. total disposable income divided by total consumption e. the change in disposable income minus the change in consumption