If a Monopolist's Marginal Revenue Is $25 a Unit and Its

question 235

Multiple Choice

If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then

• A)to maximise profit the firm should increase output.
• B)to maximise profit the firm should decrease output.
• C)to maximise profit the firm should continue to produce the output it is producing.
• D)Not enough information is given to say what the firm should do to maximise profit.

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Definitions:

Tax Breaks

Governmental incentives that reduce the tax liability of individuals or businesses, encouraging certain economic activities or investments.

Tax Expenditures

Tax expenditures are government revenue losses attributed to tax provisions allowing special exclusions, exemptions, or deductions from taxable income or providing tax credits.

National Treasury

The government department responsible for developing and implementing the country’s financial and tax policies, managing government revenue, and economic policy.

Indexed Social Benefit

Social security or welfare benefits that are adjusted (indexed) over time to maintain their value in the face of inflation or other economic changes.