Which of the Following Best Explains Why a Monopolist's Marginal

question 3

Multiple Choice

Which of the following best explains why a monopolist's marginal revenue is less than the sale price?

• A) To sell more units, a monopolist must increase the price on all units sold.
• B) As a monopolist expands output, its average total cost declines.
• C) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
• D) When a monopolist reduces price in order to sell more units, it must lower the price of some units that could otherwise have been sold at a higher price.

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Definitions:

Cy Pres Trust

A legal principle allowing courts to modify charitable trusts or gifts to closely match the donor's intent if the original purpose becomes impracticable or impossible to achieve.

Spendthrift Trust

A legal arrangement that prevents the beneficiary's creditors from accessing the trust funds, providing long-term financial security for the beneficiary.

Spendthrift Provisions

Clauses in trust agreements that prevent beneficiaries from squandering their inheritances or creditors from claiming the trust assets.

Trust Corpus

The principal amount or assets held in trust, as differentiated from the income generated by those assets.