question archive Which of the following is consistent with a monopoly? A
Which of the following is consistent with a monopoly? A
Subject:MarketingPrice:2.88 Bought3
Which of the following is consistent with a monopoly?
A. An increase in average total cost with increase in output.
B. Marginal revenue that is less than the selling price.
C. A horizontal demand curve.
D. The free entry of competitive firms.
E. A single buyer.
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Ans: Marginal revenue that is less than the selling price.
A monopoly firm faces a downward sloping demand curve and the marginal revenue (MR) curve lies below the demand curve. The profit maximization condition for the monopolist is MR = MC. So, at the profit maximizing point, the price is greater than MR and MC.
