Figure 15-14 -Refer to Figure 15-14. If the Monopoly Operates at an Operates

question 271

Multiple Choice

Figure 15-14
-Refer to Figure 15-14. If the monopoly operates at an output level less than Q0, then an increase in output toward (but not exceeding) Q0 would

• A)raise the price and raise total surplus.
• B)lower the price and raise total surplus.
• C)raise the price and lower total surplus.
• D)lower the price and lower total surplus.

---

Definitions:

Marginal Revenue

Extra profit generated from the sale of one more unit of a product or service.

Marginal Cost

The additional cost incurred to produce one additional unit of a good or service.

Average Variable Cost

The variable cost of production (costs that change with output level) divided by the quantity of output produced.

Product Differentiation

A marketing strategy where a company attempts to distinguish its product or services from the competition.