A Monopolist Produces at a Point Where the Price Elasticity

question 22

Multiple Choice

A monopolist produces at a point where the price elasticity of demand is -0.7 and the marginal cost is $2.If you were hired to advise this monopolist on how to increase his profits, you would find that the way to increase his profits is to

• A)increase his output.
• B)lower the price.
• C)decrease his output.
• D)produce the output level where marginal cost equals price.
• E)increase his advertising efforts.

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Definitions:

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The act of engaging in verbal communication to express thoughts, ideas, or feelings.

Babbling Stage

Beginning around 4 months, the stage of speech development in which an infant spontaneously utters various sounds at first unrelated to the household language.

Telegraphic Speech

Telegraphic speech refers to the two-word phrases used by toddlers when learning to speak, which typically include only essential words to get their point across.

Adult Grammar

The set of structural rules governing the composition of sentences, phrases, and words in any given language as used by adults.