A Single-Price Monopolist Is Currently Producing an Output Level Where

question 47

Multiple Choice

A single-price monopolist is currently producing an output level where price equals marginal cost,and profits are positive.In order to maximize profits,this monopolist should

• A)produce zero output.
• B)increase production and reduce price.
• C)decrease production and increase price.
• D)not change his output level,because he is currently earning profits.
• E)reduce price and let production adjust to the new price.

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Definitions:

Pricing

Pricing is the process of determining the monetary value of a product or service, taking into account factors like cost of production, market demand, and competitive prices.

Competitive Parity

A strategy where companies set their prices or marketing efforts to match those of their competitors to maintain market share.

Similar Prices

A situation where products or services offered by different businesses have little to no price variation between them.

Major Competitors

The top or primary companies that compete in the same industry or market, offering similar products or services.