The Following Table Shows the Units of Output Sold at Different

question 96

Multiple Choice

The following table shows the units of output sold at different price levels by Gizmo's Inc.Table 11.1

-For a monopolist with a linear demand curve, total revenue is maximum when:

• A)marginal revenue is positive.
• B)marginal revenue is at its maximum.
• C)the price elasticity of demand is greater than unity.
• D)the price elasticity of demand is equal to unity.
• E)marginal revenue is at its minimum.

---

Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for the loans they take from the central bank or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

NPV

NPV (Net Present Value) is a financial metric that calculates the present value of expected future cash flows of an investment, subtracting the initial investment cost.

Initial Cash Outflow

The initial amount of money paid out or expended, typically for an investment or purchase, before any returns are considered.

Required Return

The minimum rate of return an investor expects to achieve by investing in a particular asset or project.