When a Monopolist Sells Two Units of Output Its Total

question 183

Multiple Choice

When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. In order to sell three units of output instead of only two, the monopolist must

• A) increase its price by $30 per unit.
• B) decrease its price by $90 per unit.
• C) make no change in price and increase output by one unit.
• D) decrease its price by $30 per unit.

---

Definitions:

Overhead Expenses

Indirect costs of a business that are not directly linked to a specific product or service, such as rent, utilities, and administrative expenses.

Reclining Chair

A comfortable chair that adjusts to support various sitting and lying positions, often with a tilting back and raising footrest.

Overhead Expenses

Costs that are not directly tied to the production of goods or services, such as rent, utilities, and administrative expenses.

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and tax.