Under Which of the Following Situations Would a Monopolist Increase

question 45

Multiple Choice

Under which of the following situations would a monopolist increase profits by lowering price (and increasing output) ?

• A) if it discovered that it was producing where MC = MR
• B) if it discovered that it was producing where its MC curve intersects its demand curve
• C) if it discovered that it was producing where MC < MR
• D) under none of these circumstances because a monopolist would never lower price

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Definitions:

Pythagoras

A Greek mathematician.

Vector

A line having a specific length and direction.

Magnitude

A numerical value assigned to the size or amount of a physical quantity (such as force, mass, or electric current) without regard to its direction.

Direction

A course along which someone or something moves.