Will a profit-maximizing monopolist who is not subject to government regulation produce a quantity where the MR < 0?
What will be an ideal response?
Never. If the MR < 0, the firm would always be better off decreasing its production to raise prices. Doing so increases revenues and decreases costs, resulting in a higher level of profit.
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Refer to Figure 7.1. If Angus chooses to earn the most money and Dudley calls the police, Dudley will receive a daily payoff of
A) $350. B) $550. C) $700. D) none of the above
The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:
A. equilibrium. B. optimization. C. maximization. D. market collapse.
After deregulation airline prices _____ and the prices charged by long distance trucking firms _____.
Fill in the blank(s) with the appropriate word(s).
Persistent government budget deficit result in ________ taxes and a ________ stock of capital in the future
A) higher, larger B) lower, larger C) higher, smaller D) lower, smaller