Say that a monopolist is currently operating on the inelastic region of its demand curve. To maximize its profits, it should:
a. raise its prices
b. lower its prices.
c. maintain its current price.
d. either raise or lower its prices, depending on how high its marginal cost curve is.
a
You might also like to view...
Price elasticity of supply is defined as
A) the quantity supplied divided by the quantity demanded. B) the change in the quantity supplied divided by the change in the quantity demanded. C) the percentage change in the quantity supplied divided by the percentage change in price. D) the percentage change in the quantity supplied divided by the percentage change in the quantity demanded.
Which of the following is classified as a liability for a commercial bank?
A) Reserves B) Commercial loans C) Demand deposits D) Deposits with the Federal Reserve
The term utility refers to the:
a. usefulness of a good in relation to its scarcity. b. necessity of a good. c. price of a good. d. number of goods a consumer has. e. pleasure or satisfaction a consumer receives upon consuming a good.
Consider Figure 6.4 in your textbook, as indicated below. If the equation for the demand curve were P = 10 - Q and MC constant at 4,
(a) Find the competitive level of output and price.
(b) Find the marginal revenue and derive the rent seeking cartel's of output and price.
(c) How much rent is being raised?