Author Question: Which of the following best explains why a monopolist's marginal revenue is less than the sale ... (Read 72 times)

sheilaspns · **on:** Jun 30, 2018

Which of the following best explains why a monopolist's marginal revenue is less than the sale price?
a. To sell more units, a monopolist must increase the price on all units sold.
b. As a monopolist expands output, its average total cost declines.
c. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
d. When a monopolist reduces price in order to sell more units, it must lower the price of some units that could otherwise have been sold at a higher price.

Question 2

Which of the following is consistent with increasing returns to scale?
a. An upward sloping marginal cost curve
b. A downward sloping marginal cost curve
c. An upward sloping long-run average cost curve
d. A downward sloping long-run average cost curve