A Monopolist Will Maximize Profits By

question 32

Multiple Choice

A monopolist will maximize profits by:

• A) setting his price as high as possible, while a perfectly competitive firm will take price from the market.
• B) setting his price at the level that will maximize per-unit profit, while a perfectly competitive firm will minimize per-unit loss.
• C) producing the output where marginal revenue equals marginal cost, just as a perfectly competitive firm will.
• D) producing the output where price equals marginal cost, while a perfectly competitive firm will produce where marginal revenue equals marginal cost.

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Definitions:

Subjective

Based on or influenced by personal feelings, tastes, or opinions rather than external facts.

Schachter-Singer

Two psychologists who proposed a theory of emotion, suggesting that physiological arousal is interpreted in the context of environmental cues to produce emotional experience.

Two-Factor Theory

A theory proposed by Herzberg that explains job satisfaction and motivation by categorizing workplace factors into hygiene factors and motivators.

Cognitive

Relating to mental processes such as perception, memory, thinking, and problem-solving.