Consider a Price Ceiling Imposed on a Monopoly

question 10

Multiple Choice

Consider a price ceiling imposed on a monopoly.For what quantities will the monopoly's new marginal revenue curve be horizontal at the ceiling price?

• A) For quantities where the demand curve lies above the ceiling price.
• B) For quantities where demand is elastic.
• C) For quantities where marginal cost is rising.
• D) Marginal revenue will be constant and equal to the ceiling price for all quantities.

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