If a Monopolist Is Producing a Rate of Output at Which

question 14

Multiple Choice

If a monopolist is producing a rate of output at which market demand is inelastic,

• A)it may or may not be maximizing its short-run profit
• B)reducing output would reduce both total revenue and total cost
• C)reducing output would increase both total revenue and total cost
• D)reducing output would increase total revenue and reduce total cost
• E)increasing output will increase its short-run economic profit

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Definitions:

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.

Marginal Product

The additional output derived from the use of one more unit of a production input, while holding other inputs constant.

Technologically Efficient

A state of production where it is not possible to increase the production of one good without decreasing the production of another, given current technology.

Autos Assembled

The total count or volume of automobiles manufactured and put together in a production process within a specific time frame.