Which of the Following Best Explains Why the Monopolist's Marginal

question 194

Multiple Choice

Which of the following best explains why the monopolist's marginal revenue is less than the sales price?

• A) To sell more units, the monopolist must reduce price on all units sold.
• B) As the monopolist expands output, the average total cost will decline.
• C) The monopolist charges each consumer the highest possible price.
• D) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

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Definitions:

Federal Withholding

The portion of an employee's wages that is withheld by the employer for the purpose of paying federal income taxes.

Supplemental Wages

Additional compensation received beyond one's regular wages, such as bonuses, commissions, or overtime pay, often subject to different tax withholding rates.

FICA Taxes

Taxes levied on both employees and employers to fund Social Security and Medicare.

SUTA Taxes

State Unemployment Tax Act taxes are state unemployment taxes employers are required to pay to provide funds for paying unemployment compensation to laid-off employees.