Which of the Following Is True of Marginal Revenue for a Monopolist

question 104

Multiple Choice

Which of the following is true of marginal revenue for a monopolist that charges a single price?

• A) P = MR because there are no close substitutes for the monopolist's product.
• B) P > MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
• C) P < MR because the monopolist must decrease price on all units sold in order to sell an additional unit.
• D) P = MR only at the profit-maximizing quantity.

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Definitions:

Centrally Planned Economies

Economic systems where decisions about production, investment, and distribution are made by the government rather than the market.

Coordination Problem

Challenges that occur when agents in an economy or organization need to optimize their decisions based on others' actions, resulting in potential inefficiencies or missed opportunities.

Inputs

The resources such as labor, materials, and capital that are used in the production process to create goods or services.

Circular Flow Model

An economic model illustrating the continuous flow of goods, services, and money among households and businesses in an economy.