In Response to a Cost-Reducing Technological Breakthrough in the Production

question 160

Multiple Choice

In response to a cost-reducing technological breakthrough in the production of its product, a profit-maximizing monopolist will normally

• A) increase price and decrease production.
• B) not change its level of output or price.
• C) decrease the price it charges for its product.
• D) increase its output and practice price discrimination.

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Definitions:

Doctrine

An established principle or policy taught or advocated, for example, in politics, law, or religion.

Bush Pilot

A pilot who operates aircraft in remote, undeveloped regions, often landing on makeshift or unprepared airstrips.

Breach Of Warranty

The failure to fulfill the terms of a promise or guarantee, which is part of a contract, regarding the quality, condition, or performance of a product or service.

Injunction

A judicial order compelling someone to do or cease doing a specific action.