If a Monopoly Is Producing an Amount of Output Level

question 60

Multiple Choice

If a monopoly is producing an amount of output level at which marginal revenue exceeds marginal cost, in order to increase its profit the monopoly will ________ its price and ________ its output.

• A) raise; decrease
• B) lower; increase
• C) lower; decrease
• D) raise; increase

Knowledge of operant conditioning principles including punishment, negative reinforcement, positive reinforcement, extinction, and modeling.

Distinguish between positive and negative reinforcement and their applications in work settings.

Appreciate the complexities around administering punishment and extinguishing undesired behaviors in organizational settings.

Understand the strategic application of reinforcement and punishment to shape desired behaviors in organizational settings.

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Definitions:

Intertemporal Price Discrimination

A pricing strategy where a seller changes prices over time for the same product or service to maximize profits by taking advantage of differences in consumers' willingness to pay at different times.

Marginal Cost

The growth in the overall expense incurred from producing an additional unit.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in decreased costs per unit.

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, no barriers to entry, and perfect information.