Which of the following best characterizes the tradeoff faced by a monopolist when deciding what quantity to produce?
A. The firm can increase its output, but needs to lower its price for only the marginal unit of output.
B. The firm can increase its output, but to do so it must charge a higher price to all customers.
C. The firm gets more revenue from new customers by increasing output, but gets less revenue from existing customers given that it lowered its price.
D. The firm gets less revenue from new customers by increasing output, but gets more revenue from existing customers given that it lowered its price.
Answer: C
You might also like to view...
If doubling the quantity of inputs more than doubles the quantity of outputs, the firm is experiencing
A. increasing returns to scale. B. decreasing returns to scale. C. constant returns to scale. D. increasing costs per unit of output.
If Slick Shades, a sunglasses manufacturer, contracts with an outside supplier to manufacture the lenses for the sunglasses, this is an example of ________.
A) outsourcing B) divestiture C) backward integration D) forward integration
Trade between countries is only based on absolute advantage
Indicate whether the statement is true or false
The Federal Reserve System can be described as a bank for bankers
a. True b. False Indicate whether the statement is true or false