GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A monopolist will fix the equilibrium output of his product where the elasticity of his AR curve is
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Zero
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Equal to or less than one
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Greater than or equal to one
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Less than one but more than zero
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Explanation:
Detailed explanation-1: -The AR curve of a monopoly firm is the same as the market demand curve because AR is always equal to the price.
Detailed explanation-2: -In other words, the monopoly firm would be in equilibrium at a point on its demand curve where e > 1 and where MR = MC.
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