Which of the following best explains why a monopolist's marginal revenue is less than the sale price?
a. To sell more units, a monopolist must increase the price on all units sold
b. As a monopolist expands output, its average total cost declines.
c. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
d. When a monopolist reduces price in order to sell more units, it must lower the price of some units that could otherwise have been sold at a higher price.
d
You might also like to view...
Differentiate between a pure strategy and a mixed strategy
What will be an ideal response?
The above figure depicts an economy
A) with an inflationary gap. B) with a recessionary gap. C) producing at full employment. D) None of the above answers is correct.
If you are following a tit-for-tat strategy in a repeated game, and your opponent makes a cooperative move, you will:
A. collude. B. make a cooperative move in the next round. C. price compete. D. defect.
Price leadership is a method by which oligopolies can
A. Encourage competition. B. Illegally raise prices. C. Maintain the "kink" in their demand curves. D. Increase prices without explicit price-fixing.