Author Question: As a monopolist increases the quantity of output produced, what happens to price (P) and marginal ... (Read 57 times)

ap345 · **on:** Jun 30, 2018

As a monopolist increases the quantity of output produced, what happens to price (P) and marginal revenue (MR)?
a. both P and MR remain constant
b. P is constant, but MR decreases
c. P decreases, but MR is constant
d. both P and MR decrease, but P falls faster than MR
e. both P and MR decrease, but MR falls faster than P

Question 2

Which of the following does not increase a McDonald's franchisee's financial stake in the success of the operation?
a. Successful owners may get additional restaurants
b. The franchise is valid for 20 years and renewable after that
c. The franchisee can safely ignore the company's standards of quality, pricing, cleanliness, hours of operation, and so on
d. The franchisee must make highly specific investments of money and time
e. The franchisee must have non-borrowed personal resources of at least 200,000 in cash