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A Manufacturing Firm Is the Sole Seller of a Specialized

Question 5

Multiple Choice

A manufacturing firm is the sole seller of a specialized machine. The demand schedule for this product is shown in the table below.

 Price $700000$600000$500000$400000$300000$200000$100000 Quantity  Demanded 0123456\begin{array} { | c | c | c | c | c | c | c | c | } \hline \text { Price } & \$ 700000 & \$ 600000 & \$ 500000 & \$ 400000 & \$ 300000 & \$ 200000 & \$ 100000 \\\hline \begin{array} { c } \text { Quantity } \\\text { Demanded }\end{array} & 0 & 1 & 2 & 3 & 4 & 5 & 6 \\\hline\end{array}
-For this firm,as quantity increases:


A) price and marginal revenue both fall, with their values equal to one another at each quantity level
B) price and marginal revenue are constant and equal to one another at each quantity level
C) price falls while marginal revenue stays constant
D) marginal revenue falls while price stays constant
E) price and marginal revenue both fall, with marginal revenue below price at each quantity level beyond zero

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