Economic theory simplifies relationships to explain how the relationships interact.

To maximize profits, the discriminating monopolist sells abroad rather than selling additional units at home because:

a. the home market is just too competitive. b. there would be more incentive for entry from other firms. c. the market price at home would rise and the firm would lose customers. d. it would lower total profits if it lowered its home price in order to sell the additional units.

The difference between accounting profit and economic profit relates to

a. the manner in which revenues are defined. b. how marginal revenue is calculated. c. the manner in which costs are defined. d. the price of the good in the market.