For a Monopolist That Does Not Price Discriminate, Economic Profit

question 138

Multiple Choice

For a monopolist that does not price discriminate, economic profit is maximized in the short run at a price of $140. Marginal revenue at that output level is

• A) equal to $140.
• B) greater than $140.
• C) less than $140.
• D) less than marginal cost.
• E) greater than average revenue.

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Definitions:

Production Possibilities

The different combinations of goods and services that a society can produce given its available resources and technology.

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than competitors.

International Specialization

The economic strategy where countries focus on the production and export of goods and services for which they have a comparative advantage.

Trading Possibilities Line

A line that shows the different combinations of two products that an economy is able to obtain (consume) when it specializes in the production of one product and trades (exports) it to obtain the other product.