A Key Assumption About the Way Firms Behave Is That

question 41

Multiple Choice

A key assumption about the way firms behave is that they

• A)minimize costs.
• B)maximize profit.
• C)maximize market share.
• D)maximize revenue.

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Definitions:

Pure Monopolist

A market structure in which a single seller controls the entire supply of a product or service, and there is no close substitute.

Marginal Revenue

is the additional revenue that a firm receives from selling one more unit of a good or service.

Nondiscriminating Pure Monopolist

A monopolist that charges all consumers the same price for its product, regardless of the differences in their willingness to pay.

Marginal Revenue Curves

A graphical representation showing how an additional unit sold affects total revenue, typically sloping downwards for firms with market power.