Author Question: When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, ... (Read 101 times)

hbsimmons88 · **on:** Jun 30, 2018

When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:
a. greater than 1.
b. equal to 1.
c. less than 2.
d. equal to 0.

Question 2

A local restaurant offers an all you can eat ribs special. You pay 11.95, and then you can eat as many servings as you desire at no additional cost. It would follow that you will stop eating when:
a. your marginal utility (or value) derived from eating another serving is zero.
b. your total utility (or value) derived from all of the servings consumed just equals 11.95.
c. your marginal utility (or value) derived from another serving equals 11.95.
d. it is physically impossible for you to eat any more.