If the Monopolist Is Operating in the Elastic Portion of Its

question 49

Multiple Choice

If the monopolist is operating in the elastic portion of its demand curve,then an increase in price will:

• A)increase total revenue.
• B)decrease total revenue.
• C)increase marginal revenue.
• D)leave total revenue unchanged.

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Definitions:

Supply Curve

The supply curve is a graphical representation that shows the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Zero Economic Profit

A situation where a firm's total revenues are exactly equal to its total costs, including opportunity costs, typically occurring in perfect competition in the long run.

Marginal Firm

A business that operates at the minimum level of profitability where any decrease in market prices would cause it to exit the market.

Accounting Profits

Accounting profits represent the financial gains of a business as calculated by revenue minus explicit costs, according to standard accounting practices.