Suppose That a Profit-Maximizing Monopoly Firm Undergoes a Substantial Technological

question 31

Multiple Choice

Suppose that a profit-maximizing monopoly firm undergoes a substantial technological change that reduces its marginal and average total costs by $40.If in response to its reduction in cost the firm changes its price in a profit-maximizing way,then we can predict that its total economic profit will:

• A)fall.
• B)remain unchanged.
• C)rise.
• D)It is not possible to make a determination from the information given.

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Definitions:

Herzberg's Two-factor Theory

A theory of motivation proposed by Frederick Herzberg that suggests job satisfaction and dissatisfaction arise from two different sets of factors - hygiene factors and motivators.

Hygiene Factors

Factors that contribute to motivation that are found in the job context, such as working conditions, interpersonal relations, organizational policies, and compensation.

Work Setting

The physical and social environment in which people perform their jobs.

Hygiene Factors

Factors related to the work environment that can lead to job dissatisfaction if absent, such as salary, company policies, working conditions, and job security.