Suppose That a Monopoly Is Currently Producing the Quantity at Which

question 288

Multiple Choice

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost.The monopoly can increase its profit by ________.

• A) shutting down
• B) lowering its price and increasing its output
• C) raising its price and decreasing its output
• D) lowering its price and decreasing its output
• E) not changing its price and increasing its output

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Definitions:

Free Association

A psychoanalytic technique in which a patient says whatever comes to mind without censorship as a way to uncover unconscious thoughts and feelings.

Reality

The state of things as they actually exist, outside of individual perceptions or interpretations.

Ego

The largely conscious, “executive” part of personality that, according to Freud, mediates among the demands of the id, the superego, and reality. The ego operates on the reality principle, satisfying the id’s desires in ways that will realistically bring pleasure rather than pain.

Oedipus Complex

According to Freud, a boy’s sexual desires toward his mother and feelings of jealousy and hatred for the rival father.