If a Monopolist Is Producing a Level of Output at Which

question 84

Multiple Choice

If a monopolist is producing a level of output at which demand is inelastic,then

• A)the firm is not maximizing profit.
• B)marginal revenue is positive.
• C)total revenue will decrease if the firm produces more output.
• D)both a and b
• E)both a and c

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Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, typically related to selling, general, and administrative activities rather than production.

Selling and Administrative Expense

The combined total of all expenses directly related to the selling of products and the administration of a business.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are an integral part of the finished product.

Transportation Out

Transportation out refers to the costs associated with delivering goods from a seller to a buyer, often recognized as a selling expense.