The monopolist should NEVER produce in the
A) elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price.
B) inelastic segment of its demand curve because further lowering of the price reduces total revenue.
C) range of output for which the price elasticity of demand is infinity.
D) range of output for which there is a price elasticity exceeding one.
B
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The above figures show the market for HD televisions. If there are severe earthquakes that destroy a significant number of HD television manufacturing plants, which figure shows the effect of the earthquake?
A) Figure A B) Figure B C) Figure C D) Figure D E) None of the figures represent this change.
Assuming your local cash price is quoted above the CBOT futures price, an increase in transportation costs in your area would be expected to have what effect on the basis:
A. Widen the basis. B. Strengthen the basis. C. No effect on the basis. D. Not enough information to tell.