Suppose That a Monopolist Calculates That at Its Present Output

question 48

Multiple Choice

Suppose that a monopolist calculates that at its present output level, marginal cost is $2.00 and marginal revenue is $3.00. The firm could increase profits by

• A)increasing price and decreasing output.
• B)decreasing price and increasing output.
• C)decreasing price and leaving output unchanged.
• D)decreasing output and leaving price unchanged.

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Definitions:

Score a Point

In competitive contexts, the achievement of earning a point, often contributing to a participant's or team's total score.

Independent

In statistics, a term used to describe two or more variables that are not associated with each other; each variable's distribution does not depend on the values of others.

Dependent

In statistics, a variable whose value depends on the influence or measurement of another variable.

Proportion

A statistical measure that represents the fraction of the total number of outcomes in a given category relative to the total number of outcomes in all categories.