When the Monopolist Chooses Its Quantity Supplied, It Will

question 129

Multiple Choice

When the monopolist chooses its quantity supplied, it will:

• A)set the price equal to marginal cost.
• B)set the price higher than what consumers are willing to pay for that quantity.
• C)set the price equal to the amount consumers are willing to pay for that quantity.
• D)set the price lower than the demand curve to create a perceived shortage.

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Definitions:

Long-Run Cost Function

A mathematical relationship expressing the lowest cost at which a firm can produce any given level of output in the long run, when all input factors are variable.

Output

The total amount of goods or services produced by a company, industry, or economic system.

Price

The amount of money required to purchase a good or service, set by the interplay of supply and demand forces in the market.

Total Cost

The full expense incurred in the production or acquisition of goods or services, including both fixed and variable costs.