A Non-Discriminating Monopolist Observes That Marginal Revenue Is $23 and Marginal

question 137

Multiple Choice

A non-discriminating monopolist observes that marginal revenue is $23 and marginal cost is $30 at its present output level.In order to maximize profit,it should _____

• A)raise price and lower output.
• B)lower both price and output.
• C)raise both price and output.
• D)lower price and raise output.
• E)lower output but leave price unchanged.

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Definitions:

Full Cost

The total cost of manufacturing and delivering a product or service, including direct and indirect costs.

Opportunity Costs

The potential benefits lost when one alternative is chosen over another.

Bad Decisions

Choices or judgments that result in adverse outcomes or fail to meet the intended objectives or goals.

Service Department

A division within a company that provides after-sales services to customers, such as repairs, maintenance, and support.