The Standard Monopoly Model Eliminates the Monitoring Problem by Assuming

question 63

Multiple Choice

The standard monopoly model eliminates the monitoring problem by assuming that:

• A) the owner does not maximize profit.
• B) marginal cost is zero, and so the output at which profit is maximized is the same as the output at which sales revenues are maximized.
• C) the owner of the firm makes all the decisions.
• D) the owner of the firm has no control over decisions.

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Definitions:

Negative Reinforcement

The strengthening of a response (increases in frequency) because it is followed by the removal of a (presumably) unpleasant stimulus.

Control of Antecedents

The management or manipulation of factors that precede and potentially trigger certain behaviors or reactions, used as a strategy in behavior modification.

Decrease a Response

A reduction in the intensity, frequency, or effectiveness of a response to a stimuli or situation.

Antecedent

Something that exists or happens before something else and may influence or cause it.