If a Monopolist's Price Is $50 Per Unit and Its

question 167

Multiple Choice

If a monopolist's price is $50 per unit and its marginal cost is $25, then

• A)to maximize profit the firm should increase output.
• B)to maximize profit the firm should decrease output.
• C)to maximize profit the firm should continue to produce the output it is producing.
• D)Not enough information is given to say what the firm should do to maximize profit.

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Definitions:

Total Utility

The total satisfaction received from consuming a particular quantity of goods or services.

Marginal Utility

The boost in contentment or usefulness a consumer gets from purchasing one more unit of a product or service.

Dozen Oysters

A quantity unit referring to a grouping of twelve oysters, often used in the sale and serving of this seafood.

Beers

Alcoholic beverages made from fermented grains, primarily barley, and flavored with hops and other ingredients.