UGC NET
   Top Resources
Chonita Borah posted an Question
October 06, 2020 • 20:21 pm 50 points
  • UGC NET
  • Economics

14. if the demand for the product of a monopoly firm is inelastic, then (a) its marginal revenue is negative b) its total revenue is unchanged when the firm low

14. If the demand for the product of a monopoly firm is inelastic, then (A) its marginal revenue is negative B) its total revenue is unchanged when the firm lowers its price (C) its total revenue increases when the firm lowers its price (D) its marginal revenue is equal to zero 15. Compared to single-price a monopoly, the output of a perfectly competitive industry with the samhe Costs (A) is more than the monopoly's output (B) is less than the monopoly's output (C) could be more than, less than, or equal to the monopoly's output (D) is the same as the monopoly's output RSKD-11--16111.

1 Answer(s) Answer Now
  • 0 Likes
  • 2 Comments
  • 0 Shares
  • comment-profile-img>
    Nidhi taparia best-answer

    14. Option (A) is correct. When demand or AR is inelastic, that means demanded quantity will not change much even as the price changes. Based on the relationship between AR, MR and elasticity, which is - AR = MR (e/(e-1)) 15. The correct answer is (A). Monopoly price is higher and monopoly output is lesser than the case of perfect competition. Since in Monopoly MR is below AR, it's price is determined by MR = MC which is different from Perfect Competition where equilibrium is determined when MC = MR = AR (because here MR = AR).

whatsapp-btn

Do You Want Better RANK in Your Exam?

Start Your Preparations with Eduncle’s FREE Study Material

  • Updated Syllabus, Paper Pattern & Full Exam Details
  • Sample Theory of Most Important Topic
  • Model Test Paper with Detailed Solutions
  • Last 5 Years Question Papers & Answers

Sign Up to Download FREE Study Material Worth Rs. 500/-