Suppose a Firm Has a Monopoly on the Sale of Widgets

question 478

Multiple Choice

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve. When selling the 100^th widget, the firm will always receive

• A)less marginal revenue on the 100^th widget than it received on the 99^th widget.
• B)more average revenue on the 100^th widget than it received on the 99^th widget.
• C)more total revenue on the 100 widgets than it received on the first 99 widgets.
• D)a lower average cost per unit at 100 units of output than at 99 units of output.

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Definitions:

Strategic Planning

The process of defining a company’s strategy or direction and making decisions on allocating resources to pursue this strategy.

Tactical Planning

Short-term, detailed planning that supports strategic goals by focusing on day-to-day operations and resources.

Operational Planning

The process of creating specific procedures and actions to achieve tactical goals and objectives within a short time frame.

Competitive Differentiation

Unique combination of organizational abilities, products, and approaches that sets a company apart from competitors in the minds of customers.