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emmainna [20.7K]
3 years ago
14

A monopolist introduces a technological innovation that lowers the marginal cost and average cost of production. The price of th

e good and the level of output are most likely to change in which of the following waysPrice Level of Output Profits
A. Remain constant Remain constant Increase
B. Remain constant Increase Remain constant
C. Increase Decrease Increase
D. Decrease Increase Increase
E. Decrease Remain constant Remain constant

Business
1 answer:
yawa3891 [41]3 years ago
3 0

Answer:

A Price: Remain constant, Level of Output: Remain constant, Profits: Increase

Explanation:

The image attached shows the different possible solutions. Options can be eliminated based on the problem statement. First, Options B, C and D can be discounted because of the change in output levels. From the information available, the technological innovation lowers marginal cost and cost of production, however it does not affect production time or output levels.

For the two remaining options, A and E, both are possible scenarios based on the information available.

Option E:

Price decreases, output level remains the same and profit remains the same. While this is a possible outcome, as the business is a monopoly, there is no incentive for the monopolist to reduce prices along with cost as they are already the only player in the market. Especially when the reduction in price does not result in increased profit.

Option A:

Price and output level remain constant, while profit increases. This is the most likely outcome as the business is a monopoly. The owner can take advantage of the reduced costs and sell at the same price to increase profits.

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Answer:

a. mostly cigarette buyers.

Explanation:

The law of demand states an inverse relationship between quantity demanded of a good and it's price, keeping other factors affecting demand as constant.

Price elasticity of demand refers to the degree of responsiveness of quantity demanded to a change in price.

Alcohol and cigarettes are exceptions to the law of demand since in their case, the factor of addiction presides which outweighs rational decision making.

Thus, price elasticity of demand of cigarettes is inelastic. So a marginally higher price charged for cigarettes will not reduce their consumption.

A new tax on cigarettes would raise their prices. The manufacturers, to cover such taxes and maintain the same margin as before would further raise the prices of cigarettes further.

Thus, the tax burden would be shifted to the consumers and hence majorly borne by them.

3 0
3 years ago
More than 99% of all U.S. firms are classified as small businesses, and they employ about half of private workers. A small busin
shusha [124]

The small businesses in the United States operate at a very high level, and form a big chunk of the total national employment.

<h3>What is a small business?</h3>

A business which runs and operates on a very small scale, defined as per the government authorities from time to time, is known as a small business.

The advantages of a small business are,

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The disadvantages of a small business are,

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Hence, the significance of a small business is aforementioned.

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3 0
1 year ago
HELP PLEASE ASAPPP PLEASE AND THANK YOU :((
Ganezh [65]

Answer:

Which business would you rather work for and why?

Soleproprietorship

Explanation:

Soleproprietorship entails when one solely owns a business makes decision for the company.

4 0
3 years ago
Companies that stay at the forefront of technological advances in their industries are said to have_________.
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Answer:

C

Explanation:

First mover advantage tend to enjoy competitive advantage. These are firms that always at the forefront of advances in their industries. First mover advantage may be gained by early purchase of resources or by technological leadership.

First movers can be rewarded with huge profits margins if its capitalize on its advantage.

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3 years ago
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A surplus or shortage in the money market is eliminated by adjustments in the price level according to classical theory, but not
Andre45 [30]

Answer:

The correct answer is option A.

Explanation:

According to the classical theory, the quantity of money  is directly related to price level. So, any shortage or surplus in the money market can be corrected by increasing or decreasing price level.

According to the liquidity preference theory, however, money is demanded for transactionary, precautionary and speculative motive. So, only price level does not affects the quantity of money. Interest rates also effect the demand for money.

So, option A is the correct answer.

8 0
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