The Process by Which New Products and Methods of Production

question 221

Multiple Choice

The process by which new products and methods of production are continuously replacing old ones is known as

• A) the invisible hand principle.
• B) the production possibilities frontier.
• C) creative destruction.
• D) the fallacy of composition.

Understand the basic principles of how monopolies determine their profit-maximizing level of output.

Identify the relationship between marginal cost (MC) and marginal revenue (MR) in maximizing monopolist’s profit.

Calculate the monopolist’s profits based on given demand and cost data.

Understand the concept of price discrimination and its impact on monopolist’s profits.