All of the Following Statements,except One,are Correct in Short-Run Equilibrium

question 155

Multiple Choice

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

• A)Both face downward-sloping demand curves for their output.
• B)Both produce all output units for which marginal revenue exceeds marginal cost.
• C)Both produce in the range where marginal revenue is positive.
• D)Both are price setters.
• E)Both produce an output level for which price exceeds marginal cost.

---

Definitions:

Machine-Hours

A measure of the amount of time machines are run in the production process, used in allocating costs to products.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual units of production, based on estimated costs and activity levels.

Machine-Hours

A measure of the amount of time machines are used in the production process, often related to allocating manufacturing overhead costs.