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Koel is the single producer of home air conditioners in its rural market. The firm's monthly demand is described by the equation P = 5000
Koel is the single producer of home air conditioners in its rural market. The firm's monthly demand is described by the equation P = 5000 5Q, where P is the price and Q is the quantity of units sold. Which of the following must be true of Koel? (2 points)
An increase in price decreases the quantity sold. | |
It is a natural monopoly. | |
A decrease in price decreases the quantity sold. | |
Higher levels of output bring in increasingly lower total revenue if demand is elastic. | |
Maintaining the current price decreases the quantity sold over time. |
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