As a Monopolist Increases the Quantity of Output Produced, What

question 242

Multiple Choice

As a monopolist increases the quantity of output produced, what happens to price (P) and marginal revenue (MR) ?

• A)both P and MR remain constant
• B)P is constant, but MR decreases
• C)P decreases, but MR is constant
• D)both P and MR decrease, but P falls faster than MR
• E)both P and MR decrease, but MR falls faster than P

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Definitions:

B2B

Business-to-Business, a model wherein transactions or trade happens directly between two businesses rather than between a business and individual consumer.

B2C

Business-to-Consumer, referring to the process of selling products and services directly to consumers who are the end-users.

C2B

Consumer to Business, a business model where consumers (individuals) create value or products that businesses purchase, consume or use, essentially reversing the traditional business-to-consumer (B2C) model.

C2C

Consumer-to-Consumer, a business model that facilitates the transaction of products or services between customers, typically using the internet.