CFA Practice Question
A monopolist sets the price of a good by choosing the level of output and then setting the price according to the ______.
B. market demand curve
C. marginal cost curve
D. market supply curve
E. aggregate demand curve
A. marginal revenue curve
B. market demand curve
C. marginal cost curve
D. market supply curve
E. aggregate demand curve
Correct Answer: B
A monopolist sets the price of a good by first choosing a level of output and then finding the price on the market demand curve that corresponds to that level of output.
User Contributed Comments 5
| User | Comment |
|---|---|
| sarath | It first chooses a level of output by selecting MR = MC ....and then choosing the corresponding price on the market demand curve. |
| myzec | Please explain the difference between market demand and aggregate demand |
| wundac | Aggregate demand is the total amount of goods and services demanded in the economy at alternative income in a given period, including both consumer and producer's good: Total spending. Market Demand is the total demand of all consumers in a market. In this case only the sums of the quantities demanded by each consumer at every price are used to determine the level of demand experienced by entire market at each price. |
| azramirza | thanks wundac...it makes sense |
| choas69 | how to choose price? choose appropriate output. how to choose appropriate output? MC=MR |