At a Price of $20, the Marginal Revenue of a Monopolist

question 107

Multiple Choice

At a price of $20, the marginal revenue of a monopolist is $12. If the marginal cost of production is $10, what should the monopolist do in order to maximize profits?

• A)Increase its price.
• B)Decrease its price.
• C)Keep its price at the same level.
• D)not enough information to solve

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Definitions:

Neoteny

The retention of juvenile features in the adult animal, a phenomenon observed in some species which results in adult individuals retaining traits typically only seen in juveniles.

Vaulted Cranium

Refers to skulls with a rounded shape due to the overarching structure of the cranial vault, a characteristic feature of human evolution.

Upright Mobility

The ability to move or walk in an upright position.

Correlated

When two or more variables or sets of data have a mutual relationship or connection, where changes in one are associated with changes in the other.