Why is marginal revenue less than price for every level of output except the first?
What will be an ideal response?
The monopolist is the industry, so its demand curve slopes downward. To increase sales, the monopolist must lower price. The price decreases apply not to the additional quantity sold, but also to all other units of output which otherwise would have been sold at a higher price. As each extra unit of output is sold, it will contribute to total revenue its price less the sum of the price decreases that apply to all prior units of output sold.
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Which of the following would be considered a one-time expense?
A. Raw materials B. A delivery truck C. Radio ads D. A manager's salary
Which of the following is a possible result of price confusion?
A. People are less able to take actions that mitigate the impact of monetary policy. B. Sellers will face pressure to provide more accurate pricing information. C. The price system becomes a less effective way to coordinate economic action. D. The signals that prices send become clearer and more necessary.
Adverse selection and moral hazard problems arise when there is
A. symmetric information. B. too much information. C. asymmetric information. D. complete information
Refer to Figure 11-2. The curve labeled "F" is
A) the output supply curve. B) the total product curve. C) the marginal product curve. D) the average product curve.