A Monopolist Finds Out That If He Lowers His Price

question 81

Multiple Choice

A monopolist finds out that if he lowers his price from $10 to $8, sales rise from 100 units to 115 units. Therefore, in this price range,

• A) marginal revenue is positive.
• B) marginal revenue is negative.
• C) the price elasticity of demand is greater than one.
• D) both a and c are correct.

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Definitions:

Right Angles

A measure of angle which is exactly 90 degrees, indicating a perpendicular relationship between two lines or planes.

Perfect Complements

Two goods with right-angle indifference curves.

Indifference Curves

Indifference curves are graphical representations in microeconomics that indicate different combinations of two goods between which a consumer is indifferent, reflecting their preferences and utility.

Right Angles

An angle measuring exactly 90 degrees.