If a Monopolist Produces 100 Units of Output at a Market

question 89

Multiple Choice

If a monopolist produces 100 units of output at a market price of $5 per unit with marginal revenue per unit equaling $4,we would expect that if the monopolist's good were provided under pure competition,quantity would be:

• A) higher than 100 units,price would be lower than $5,and MR = price.
• B) lower than 100 units,price would be greater than $5,and MR = price.
• C) higher than 100 units,price would be greater than $5,and MR = price.
• D) lower than 100 units,price would be lower than $5,and MR = price.

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Definitions:

Perpetual Inventory System

A continuous tracking method for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

LIFO

Last In, First Out, an inventory accounting method where the last items placed in inventory are the first ones to be used or sold.

Ending Inventory

Products' value that is available for transaction at the culmination of an economic period.

Merchandise Inventory

Goods held by a business for the purpose of resale to customers in the ordinary course of business.