Which of the following best explains why the monopolist's marginal revenue is less than the selling price?
A. To sell more units, the monopolist must reduce price on all units sold.
B. As the monopolist expands output, the average total cost will decline.
C. The monopolist charges each consumer the highest possible price.
D. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
Answer: A
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If market prices help inform individuals about the relative scarcities of goods and services, then abolishing market prices would
A) finally allow people to overcome scarcity. B) eliminate important information. C) abolish the dog-eat-dog mentality of market competition. D) tend to create permanent surpluses of most goods. E) accomplish all of the above.
What were the three shocks that the U.S. economy experienced during 2007-2009, and how did these shocks affect the IS curve, the MP curve, and the Phillips curve?
What will be an ideal response?
Depreciation refers to a decrease in the value of a durable good caused by: a. an increase in the price level. b. changes in the interest rate
c. wear and tear over time. d. changes in tax laws. e. a decrease in its resale value.
Assuming that bus travel is an inferior good, an increase in consumer income, other things being equal, will cause a(n):
a. upward movement along the demand curve for bus travel. b. downward movement along the demand curve for bus travel. c. rightward shift in the demand curve for bus travel. d. leftward shift in the demand curve for bus travel.