Respuesta :
In response to a technical innovation that decreases the costs of production, a profit-maximizing monopolist would (C) often drop the price it charges for its product.
Who is a profit-maximizing monopolist?
- Profit maximization is one trait shared by monopolists. In a monopolistic market, when there is no competition, a monopolist can regulate both the price and the quantity requested.
- A monopoly's profit maximization level is determined by equating its marginal cost and marginal revenue.
- By examining the marginal revenue and marginal expenses of producing an additional unit, a monopolist can estimate the price and quantity that will maximize its profits.
- The company should produce an additional unit if the marginal revenue is greater than the marginal cost.
- A profit-maximizing monopolist will typically reduce the price it charges for its product in reaction to a technological advancement that lowers the costs associated with producing it.
Therefore, in response to a technical innovation that decreases the costs of production, a monopolist that prioritizes profit would (C) often drop the price it charges for its product.
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