When a Monopolist Decreases the Price of Its Good, Consumers

question 444

Multiple Choice

When a monopolist decreases the price of its good, consumers

• A)continue to buy the same amount.
• B)buy more.
• C)buy less.
• D)may buy more or less, depending on the price elasticity of demand.

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Definitions:

Positive Amount

A value that is greater than zero, indicating a quantity that adds to a total rather than subtracting from it.

Price

The financial charge expected, required, or dispensed as payment for a product.

Marginal Cost Curve

A graph that shows the change in the total cost of producing one additional unit of a good or service.

Average Fixed Cost Curve

A graphical representation showing how the average fixed cost per unit changes as the quantity of output produced changes.