If a Monopoly Discovers That the Demand for Its Output

question 26

Multiple Choice

If a monopoly discovers that the demand for its output has become more elastic at the original output level,then it will respond by

• A) producing more and setting a higher price.
• B) setting a lower price.
• C) setting a higher price.
• D) producing more while leaving price unchanged.

---

Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed.

Gross Motor Skills

The abilities required to control the large muscles of the body for walking, running, sitting, and other activities.

Fine

In another context, refers to a monetary charge imposed as a penalty for an offense.

Reflexive

Refers to automatic responses to stimuli, not requiring conscious thought.