Which of the Following Best Explains Why Marginal Revenue for a Monopolist

question 187

Multiple Choice

Which of the following best explains why marginal revenue for a monopolist is less than the sales price?

• A) To sell more units, the monopolist must reduce price on all units sold.
• B) As the monopolist expands output, the average total cost of production declines.
• C) The monopolist charges each consumer the highest possible price.
• D) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

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Definitions:

Money Supply

The total amount of money available in an economy at a specific time, including cash, coins, and balances held in bank accounts.

Interest-Bearing Assets

Investments or savings that earn interest over time, such as bonds, savings accounts, or loans.

Interest Rate

The percentage of a sum of money charged for its use, determining the cost of borrowing money or the return on savings and investments.

Money Market

A segment of the financial market in which financial instruments with high liquidity and short maturities are traded.