Which of the Following Can Be Concluded About a Monopolist

question 114

Multiple Choice

Which of the following can be concluded about a monopolist whose marginal revenue is zero for a particular output level?​

• A)The economic profit earned by the monopolist by producing that output level is zero.
• B)Total revenue earned by the monopolist is maximum at that output level.
• C)Total revenue earned by the monopolist increases at an increasing rate as output increases beyond that output level.
• D)Total revenue earned by the monopolist increases at a decreasing rate as output increases beyond that output level.
• E)Average revenue earned by the firm for that output level is less than marginal revenue for that output level.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present values, often reflecting the cost of capital or risk.

Perpetuity

A type of annuity that pays a fixed amount of money to an individual indefinitely, without a termination date.

Interest Rate

The percentage of principal charged by the lender for the use of its money or the rate earned on savings or investments.

Perpetual Payments

Payments that continue indefinitely, often associated with perpetuities in finance.