If a Monopolist Is Producing a Level of Output Where

question 15

Multiple Choice

If a monopolist is producing a level of output where MR is less than MC,then it should

• A)Shift its marginal cost curve upward.
• B)Increase its output.
• C)Lower its output.
• D)Lower its price.

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Definitions:

Period Cost

Costs incurred that do not directly relate to the production of goods, such as sales and administrative expenses.

Salespersons' Commissions

This refers to the payment made to sales staff based on a percentage of the sales they generate, as a form of incentive and reward.

Product Cost

The total expenditure incurred to produce, acquire, and sell products, including direct materials, direct labor, and overhead.

Period Cost

Overheads not directly linked to production, charged as expenses in the timeframe they happen.