A Monopoly Firm Can Sell 150 Units of Output for $10

question 52

Multiple Choice

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.90 per unit. The marginal revenue of the 151st unit of output is

• A) -$5.10.
• B) -$0.10.
• C) $2.45.
• D) $5.10.

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Definitions:

Antitrust Law

Antitrust law comprises regulations established to promote fair competition and prevent monopolistic business practices.

Joint Venture

A business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance.

Competitors' Purpose

A strategic objective or intention that drives actions and decisions among businesses within the same market or industry aiming to achieve a competitive edge.

Sherman Act

The Sherman Act is a foundational antitrust law in the United States, aiming to prevent monopolies and promote competition by prohibiting business practices that restrict trade.