Respuesta :
Answer:
a. False
b. False
c. False
Explanation:
a) For a monopoly, price is not equal to marginal revenue because a monopoly has the power to control price because it is in perfect competition that price equals marginal revenue but for the monopolist, marginal revenue does not equal the price since the monopolist charges the price at which buyers are willing to buy a profit-maximizing quantity.
b) It is also False that because a monopoly is the only firm in an industry, it can charge virtually any price for its product because if they do so fewer people will buy their product and they will be unable to maximize profit, the monopoly has more power in determining quantity than price. The only thing that happens is that In a monopoly, the price must be set above marginal cost so that the firm can earn a profit
c. It is NEVER true that when demand elasticity is equal to-1 marginal revenue is equal to BECAUSE when demand is inelastic (–1) then marginal revenue will be negative, since in order to sell a unit the firm would have to reduce selling price to the point of losing revenue on the existing units; implying that marginal revenue will become negative.
Answer:
a. disagree
b. disagree
c. agree
Explanation:
a. Disagree as price is greater than marginal revenue, there is a price effect for the monopolist, and it has to cut prices to increase sales.
b. Disagree as a monopoly is constrained by consumer demand, to maximise profit, the monopolist charges the price at which buyers are willing to buy the profit-maximising quantity.
c. Agree, It is always true that when demand elasticity is equal to-1 marginal revenue is equal to 0.
