A monopolist introduces a technological innovation that lowers the marginal cost

Question

A monopolist introduces a technological innovation that lowers the marginal cost and average cost of production. The price of the good, the level of output, and the firm's profits are most likely to change in which of the following ways?

   Price                    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

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

Explanation / Answer

D. Decrease Increase Increase

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.