A Monopolist Faces a Constant Marginal Cost of $1 Per

question 49

Multiple Choice

A monopolist faces a constant marginal cost of $1 per unit.If at the price he is charging, the price elasticity of demand for the monopolist's output is -0.5, then

• A)the price he is charging must be $2.
• B)the price he is charging must exceed $2.
• C)the price he is charging must be less than $2.
• D)the monopolist cannot be maximizing profits.
• E)the monopolist must use price discrimination.

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Definitions:

Immune System

The body's defense system comprising organs, tissues, cells, and proteins that work together to fight off pathogens and foreign substances.

Bacteria

Microscopic, single-celled organisms found in diverse environments, some of which can cause diseases while others are beneficial for processes such as fermentation or digestion.

Viruses

Microscopic infectious agents that can reproduce only inside the living cells of an organism and are capable of causing diseases.

Production Possibilities Curve

A graphical representation that shows the maximum possible output combinations of two products that can be produced with available resources and technology.