The total revenue test using the price elasticity of demand
A) explains why monopolies will only operate on the elastic portion of their demand curve.
B) explains why monopolies will only operate on the inelastic portion of their demand curves.
C) demonstrates why a monopoly can earn an economic profit in the long run.
D) determines whether a monopoly can perfectly price discriminate or not.
E) cannot be used for a price discriminating monopoly.
B
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According to the monetarists, when the expected rate of inflation rises, the short-run Phillips curve
a. shifts upward. b. shifts downward. c. is unaffected. d. None of the above
Firm A's motive in filing an antitrust suit against Firm B may be
a. to seek court protection against genuinely unfair practices by Firm B. b. to seek financial compensation for damages caused by Firm B. c. to create an expensive nuisance for Firm B. d. All of the above are correct.
A rise in the domestic interest rate leads to capital
a. outflows and exchange rate appreciation. b. outflows and exchange rate depreciation. c. inflows and exchange rate depreciation. d. inflows and exchange rate appreciation.
The combination of expansionary U.S. monetary policy and contractionary U.S. fiscal policy should:
A. raise the exchange rate if prices and income do not change. B. have an ambiguous effect on the exchange rate if prices and income do not change. C. not affect the exchange rate if prices and income do not change. D. reduce the exchange rate if prices and income do not change.