Suppose a Monopolist Calculates That at Present Output and Sales

question 121

Multiple Choice

Suppose a monopolist calculates that at present output and sales levels,marginal revenue is $1.00 and marginal cost is $2.00.He could maximize profits (or minimize losses) by:

• A) decreasing price and increasing output.
• B) increasing price and decreasing output.
• C) decreasing price and leaving output unchanged.
• D) decreasing output and leaving price unchanged.

---

Definitions:

Duress

Unlawful pressure exerted upon a person to coerce them into an action against their will, often making a contract voidable.

Undue Influence

An unfair manipulation by one person over another, often leading the influenced party to make decisions that are not in their best interest.

Affirming Contract

The act of formally agreeing to the terms of a contract, thereby making it legally binding.

Hadley v. Baxendale

A foundational English contract law case that established the rule regarding the recoverability of damages for breach of contract based on foreseeability.