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:

Dividends

Payments made by a corporation to its shareholders, often as a distribution of profits.

Variable Factory Overhead

Costs of production that fluctuate with the level of output, such as utility expenses and materials used in the manufacturing process, excluding direct labor and materials costs.

Fixed Factory Overhead

Costs associated with manufacturing that do not change with the level of production, such as salaries of supervisors and rent of the facility.

Sales Forecast

A sales forecast is the projection of the amount of revenue a company will generate through sales activities over a specific period.