The Figures Given Below Represent the Revenue Curves of a Monopolist

question 49

Multiple Choice

The figures given below represent the revenue curves of a monopolist. Figure 10.2
TR: Total revenue curve
AR: Average revenue curve
MR: Marginal revenue curve
-Refer to Figure 10.2.In order to maximize profits,what quantity should the monopolist produce?

• A)B
• B)E
• C)Between B and E
• D)Impossible to determine because we are not given the cost curves.
• E)Impossible to determine because we are not given the demand curve.

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Definitions:

Tax

A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.

Price-Elastic Supply

A situation where the quantity supplied of a good changes significantly as a result of changes in its price.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of products like tobacco, alcohol, and fuel, to generate revenue or discourage consumption.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.