Because of a Decrease in Labour Costs, a Monopoly Finds

question 74

Multiple Choice

Because of a decrease in labour costs, a monopoly finds that its marginal cost and average total cost have decreased. The monopoly _______ its price and _______ its quantity.

• A) lowers; decreases
• B) raises; increases
• C) lowers; increases
• D) raises; decreases

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Definitions:

Total Expenditures

The aggregate amount of spending on goods and services in an economy over a specified period.

Total Revenue

The aggregate income a company garners from its sales of goods or provision of services over a designated period.

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price, holding all other factors constant.

Price

The expected, necessary, or contributed financial amount in exchange for something.