Refer to the Graph Shown

question 21

Multiple Choice

Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit:

• A)the price of computers will increase from $400 to $600 but there will be no change in quantity demanded.
• B)the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200.
• C)the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400.
• D)there will be no effect on the price of computers.

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Definitions:

Net National Product

The total value of goods and services produced by a country's citizens, adjusted for depreciation; it reflects the nation's overall economic productivity after wear and tear on assets.

Profit-maximizing Condition

The state or point at which a business achieves the highest level of profit with the least amount of cost, often by equating marginal cost and marginal revenue.

Role Of Government

The activities undertaken by a government to regulate and guide the economy, including policy-making, taxation, and spending.

Unemployment Level

The number or percentage of the labor force that is without work but actively seeking employment.