A Monopoly Produces Widgets at a Marginal Cost of $20

question 10

Multiple Choice

A monopoly produces widgets at a marginal cost of $20 per unit and zero fixed costs.It faces an inverse demand function given by P = -100 − 4Q.Suppose fixed costs rise to $401.What happens in the market?

• A) The firm will raise the price.
• B) The firm will shut down immediately.
• C) The firm will continue to produce the same output and charge the same price.
• D) The firm will reduce its output and raise price.

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Definitions:

Learning Theorists

Researchers and psychologists who study how people learn, including the processes involved and the factors that influence learning.

Violence

Behavior involving physical force intended to hurt, damage, or kill someone or something.

Unconscious Conflicts

Internal struggles within the mind that occur without the individual's awareness, often influencing behavior and emotions.

Behaviorists

Psychologists who focus on observable behaviors and the ways in which learning influences behavior, often excluding thoughts and feelings from their study.