A Monopolist with Constant Marginal Costs Faces a Demand Curve

question 50

True/False

A monopolist with constant marginal costs faces a demand curve with a constant elasticity of demand and does not practice price discrimination.If the government imposes a tax of $1 per unit of goods sold by the monopolist, the monopolist will increase his price by more than $1 per unit.

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Definitions:

Selective Optimization

A strategy that involves focusing on and maximizing one's strengths while minimizing weaknesses through selection and optimization of resources.

Compensation

A psychological strategy or an organizational policy of providing benefits, often monetary, in exchange for work or to make up for a deficiency or injury.

Minimize

To reduce to the smallest possible amount or degree; to make something appear less important or significant.

Maximize

To increase something to its highest possible value or level.