If a nondiscriminating pure monopolist decides to sell one more unit of output, the marginal revenue associated with that unit will be:
A. equal to its price.
B. the price at which that unit is sold less the price reductions that apply to all other units of
output.
C. the price at which that unit is sold plus the price increases that apply to all other units of
output.
D. indeterminate unless marginal cost data are known.
Answer: B
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Use the following statements to answer this question:
I. If the extent of a market is broader, it is less likely that firms in the market can influence the market price. II. In determining whether two different products belong to the same market, it is necessary to know whether the two products can be used as substitutes for each other. A) I and II are both false. B) I is false, and II is true. C) I is true, and II is false. D) I and II are both true.
A pair of running shoes costs $70 in the U.S. If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar, than the real exchange rate is
a. more than 1, so a profit could be made by buying these shoes in the U.S. and selling them in India. b. more than 1, so a profit could be made by buying these shoes in India and selling them in the U.S. c. less than 1, so a profit could be made by buying these shoes in the U.S. and selling them in India. d. less than 1, so a profit could be made by buying these shoes in India and selling them in the U.S.