Suppose That a Pure Monopolist Can Sell 5 Units of Output

question 194

Multiple Choice

Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit.The monopolist will produce and sell the sixth unit if its marginal cost is

• A)$4 or less.
• B)$3.90 or less.
• C)$3.50 or less.
• D)$3.40 or less.

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Definitions:

Consideration

The value (which can be a promise, an act, or an object) exchanged between parties in a contract.

Voluntary Transfer

The act of willingly transferring ownership or interest in an asset from one party to another without coercion.

Conveyance

The act of transferring ownership of property from one party to another, often involving real estate.

Gift

A voluntary transfer of property for which the donor receives no consideration in return.