When would a profit-maximizing monopolist that operates with no government intervention choose to produce the competitive level of output?
What will be an ideal response?
A monopolist that faces a perfectly elastic demand curve sets its price equal to marginal cost and produces the competitive level of output.
You might also like to view...
Refer to the figure below. What is the price elasticity of demand when the price of rice is $6 per pound? 
A. 0.5 B. 3 C. 2 D. 0.67
A bank has deposits of $400, reserves of $50, and the desired reserve ratio is 7 percent. The bank's excess reserves are
A) $28. B) $50. C) $22. D) $0. E) $3.50
If each voter pays taxes in proportion to her demand, then _____
a. the median voter's most preferred outcome will definitely occur b. the condition for economic efficiency is satisfied c. special interests will have no power d. political institutions are optimal
When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. eventually production will decrease. B. eventually production will increase. C. there will be no change in aggregate production. D. the government will intervene by cutting down on taxes.