If a Monopolist's Marginal Costs Shift Up by $1

question 242

Multiple Choice

If a monopolist's marginal costs shift up by $1.00,then

• A)the monopoly price will rise by $1.
• B)the monopoly price will rise by more than $1.
• C)the monopoly price will rise by less than $1.
• D)there is no change in the monopoly price and profits fall.

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Definitions:

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

TSX

The Toronto Stock Exchange, which is the largest stock exchange in Canada where securities are bought and sold.

Standard Deviation

A metric that quantifies the extent of differences or variability among a group of figures.

Variance

A measure of dispersion that shows how much the data points in a set differ from the mean.