When the Demand for a Monopolist's Output Falls,the Monopolist Will

question 30

Multiple Choice

When the demand for a monopolist's output falls,the monopolist will

• A)not change the price,since it has no competition.
• B)raise the price in order to compensate for the lower demand.
• C)charge a lower price.
• D)cut its costs in order to maintain its profit margin.

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Definitions:

Substitution

The economic concept whereby consumers replace costlier items with less expensive alternatives, or firms switch between inputs to minimize costs.

Indifference Curves

A graph showing different bundles of goods between which a consumer is indifferent, representing equal levels of utility.

Income Effect

Adjustments in the financial earnings of an individual or an economy and the corresponding effect on the quantity of goods or services demanded.

Indifference Curve

A graph showing different combinations of two goods that give a consumer equal satisfaction and utility.