Question

A tablet company with a monopoly in their market discovers a new production technology. This new technology causes the marginal and average variable costs to fall by $50 per tablet. It does not impact fixed costs. Once this new technology is implemented, the tablet company adjusts its price to continue to maximize profits. We should expect production to:______.

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а increase.
b decrease.
с not change.

Answer 1

When a tablet company with a monopoly in their market implements a new production technology that lowers the marginal and average variable costs by $50 per tablet, their production should increase.

Step-by-step explanation:

When a tablet company with a monopoly in their market implements a new production technology that lowers the marginal and average variable costs by $50 per tablet, their production should increase.

The implementation of the new technology allows the company to produce tablets more efficiently at a lower cost. As a result, they can increase their production to meet the demand and maximize their profits.

This is because the new technology reduces the cost of each tablet, which gives the company the opportunity to produce more tablets and potentially capture a larger market share.