What Is the "Hotelling Rule" for a Monopolist

question 76

Multiple Choice

What is the "Hotelling rule" for a monopolist?

• A) Price minus marginal cost must rise at exactly the rate of interest.
• B) Price plus marginal cost must rise at exactly the rate of interest.
• C) Marginal revenue minus marginal cost must rise at exactly the rate of interest.
• D) Marginal revenue and marginal cost must be independent of the rate of interest.

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Definitions:

Interest

Money paid at a particular rate for the use of borrowed funds or for delaying the repayment of a debt.

Ethnic Assimilation

The process by which individuals or groups of differing ethnic heritage are absorbed into the dominant culture of a society.

Praxis

The process by which a theory, lesson, or skill is enacted, embodied, or realized in the real world; often considered the practice or application of a learned skill.

European Nations

Countries located on the European continent, each with its own distinct culture, history, and government.