Question

Assume someone organizes all farms in the nation into a singleminusprice monopoly. As a​ result, the price consumers pay for food A. rises. B. does not​ change, that​ is, it remains constant. C. falls. D. might rise or fall depending on whether the demand for food is elastic or inelastic. E. might rise or fall depending on whether the​ monopoly's marginal revenue curve lies above or below its demand curve.

Answer 1

Answer:

E. might rise or fall depending on whether the​ monopoly's marginal revenue curve lies above or below its demand curve.

Explanation:

In monopoly, the supply rule is the way how the farm will decide the price to sell the products in the market. This rule is simple, the price will be set where the demand curve cross the marginal revenue function, and not as perfect competition, where demand and supply demand cross. In monopoly the quantities are less thant perfect market situation, and the price is higher.