For a monopolist with a downward-sloping demand curve,
a. when the price is equal to zero, marginal revenue is equal to zero.
b. the coefficient of price elasticity of demand is zero.
c. as price increases, marginal revenue decreases.
d. as price decreases, marginal revenue decreases.
At a price of $5, 24 units of the good would be sold; at a price of $7, 25 units of output would be sold. The marginal revenue of the 25th unit of output is $__
In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:
a. A to B.
b. A to D.
d. C to D.
c. C to B.
The marginal revenue of the second unit of output in Exhibit 9-2 is:$____
A monopoly firm can sell its fourth unit of output for a price of $250. To sell more than five units, it must expect to receive a price:
a. equal to $250.
b. greater than $250.
c. less than $250.
d. equal to $340.
A monopoly:
d. must lower price in order to increase output.
a. can increase price and increase output at the same time.
b. can charge any price it wants and still sell all of its output.
c. can sell any output it produces provided it accepts the market price.
In Exhibit 9-3, how much vaccine should GeneTech produce to maximize its profit?
a. 300 doses per hour.
b. 400 doses per hour.
c. Between 400 and 500 doses per hour
d. 500 doses per hour.
In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?
d. $10,500.
b. $3,000.
a. $1,500.
c. $4,500.
. If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:
b. raise price and expand output to increase profit.
a. restrict output to increase the price even higher.
c. lower price and expand output to increase profit.
d. attempt to maintain this position because it is consistent with profit maximization.
A monopolist earning profit now has marginal revenue $23 and marginal cost $30. Which of the following should the firm do to increase profit?
a. Raise price and lower output.
d. Lower price and raise output.
c. Raise price and raise output.
b. Lower price and lower output.
When the monopolist is maximizing total profit in Exhibit 9-6, the average total cost of producing that output level is:$__
According to Exhibit 9-7, if the Rudd Ice Company is a monopoly and is currently charging a price of $10, what would you advise Rudd to do?
c. Decrease price and increase output.
d. Increase output and hold price constant.
b. Increase price and increase output.
a. Stay where he is currently operating because he is charging the profit-maximizing price.
in Exhibit 9-7, if the Rudd Ice Company is a monopoly and is currently charging a price of $6, what would you advise Rudd to do?
c. Decrease price and increase output.
b. Increase price and decrease output.
a. Stay where he is currently operating because he is charging the profit maximizing price.
d. Increase output and hold price constant.
As shown in Exhibit 9-8, if the monopolist produces the profit-maximizing output, total revenue is the rectangular area:
c. OQ3CP3.
d. OQ2DP4.
a. OQAP1.
b. OQ2BP2.
Which of the following correctly describes price discrimination?
b. Selling different products to identical people for different prices.
d. Selling the same product to the same person for the same price.
a. Selling different products to different people for the same price.
c. Selling the same product to different people for different prices.
Comparing a perfectly competitive market to a monopoly, which of the following is true?
c. Price = MR in the perfectly competitive market but will be higher than MR in the monopoly.
d. at that point on the market demand curve which intersects the marginal cost curve.
b. Price will be higher than MC in the perfectly competitive market but will be equal toMC in the monopoly.
a. Price will be higher and quantity will be lower in the perfectly competitive market than in the monopoly.
Suppose both a monopolist and a perfectly competitive firm are producing at where MC=$8 and MR=$10. What should the profit-maximizing firms do?
a. Both the monopolist and the perfectly competitive firm should increase output until MC = MR.
d. The monopolist should keep producing but the perfectly competitive firm should decrease output until MC = MR.
c. The monopolist should increase output but the perfectly competitive firm should shut down.
b. Both the monopolist and the perfectly competitive firm should decrease output until MC = MR.
At any point where a monopolist's marginal revenue is positive, the downward-sloping straight-line demand curve is:
c. elastic but not perfectly elastic, as is the perfectly competitive firm's.
d. inelastic, while a perfectly competitive firm's demand curve is perfectly elastic.
a. perfectly elastic, as is the perfectly competitive firm's.
b. elastic but not perfectly elastic, and a perfectly competitive firm's demand curve is perfectly elastic.
Because monopolists are protected by high barriers to entry, they:
c. will price their product at the highest possible price.
a. may be able to earn long-run economic profits.
b. will not minimize the per-unit cost of producing their output.
d. seek economic profit; however, they are not able to earn it in the long run.
Under both perfect competition and monopoly, a firm:
b. maximizes profit by setting marginal cost equal to marginal revenue.
a. faces a perfectly elastic demand curve.
c. sells at a price equal to the minimum average total cost.
d. sells at a price equal to marginal cost.
In contrast to a perfectly competitive firm, a monopolist operates in the long run
b. with a profit equal to zero.
a. at a price higher than marginal cost.
c. at an efficient level of output.
d. at the minimum point on its average total cost curve.