Suppose a Firm Has a Monopoly on the Sale of a Computer

question 287

Multiple Choice

Suppose a firm has a monopoly on the sale of a computer game and faces a downward-sloping demand curve. When selling the 50^th game, the firm will always receive

• A)less marginal revenue on the 50^th game than it received on the 49^th game.
• B)more average revenue on the 50^th game than it received on the 49^th game.
• C)more total revenue on the 50 games than it received on the first 49 games.
• D)Both b and c are correct.

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Definitions:

Supreme Court Decision

A ruling issued by the Supreme Court, which is the highest court in many countries, setting a legal precedent.

Trust

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third person.

Involuntary Assignment

Assignment of rights that takes place involuntarily, as in the cases of death and bankruptcy.

Equity Provision

A clause in an agreement that allows for adjustment based on the equity value of an entity or asset.