-In the Above Figure, for a Single-Price Monopolist Producing at Its

question 110

Multiple Choice

-In the above figure, for a single-price monopolist producing at its profit-maximizing equilibrium price and quantity, the price elasticity of demand at this equilibrium will be

• A) greater than 1 and the monopolist's total revenue is maximized.
• B) less than 1 and the monopolist's economic profit could be larger.
• C) equal to 1 and the monopolist's total revenue is maximized.
• D) greater than 1 and the economic profit is maximized but the total revenue is not.

---

Definitions:

Competitive Market

A market structure characterized by a large number of sellers and buyers where no single entity has the power to influence market prices significantly.

Profits

The financial benefit that is realized when revenue generated from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Profit-maximizing

A strategy where a firm sets its production level and pricing to achieve the highest possible profit.

Resource Combination

The process of organizing and combining different resources like capital, labor, and raw materials, to produce goods or services.