6. At its present output a monopolist determines that its marginal revenue is P3 and its marginal cost is P4.50. The monopolist will increase its profits by: a. reducing output and raising price b. increasing both price and output c. reducing both output and price d. raising price while keeping output unchanged

6. At its present output a monopolist determines that its marginal revenue is P3 and its marginal cost is P4.50. The monopolist will increase its profits by: a. reducing output and raising price b. increasing both price and output c. reducing both output and price d. raising price while keeping output unchanged

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...

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Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
How does the demand curve perceived by a monopolist compare with the market demand curve?
6. At its present output a monopolist determines that its marginal revenue is P3 and its marginal cost is P4.50. The monopolist will increase its profits by: a. reducing output and raising price b. increasing both price and output c. reducing both output and price d. raising price while keeping output unchanged 7. The supply curve of a pure monopolist: a. Is that portion of its marginal cost curve which lies above average variable cost b. Is the same as that of a purely competitive industry c. Is its average variable cost curve d. Does not exist because prices are not “given” to a monopolist 8. A monopolistically competitive firm has a: a. Highly elastic demand curve b. perfectly inelastic demand curve c. Highly inelastic demand curve d. perfectly elastic demand curve 9. The automobile, household appliance, and automobile industries are all illustrations of:…
9. Study Questions and Problems #9 For a monopolist, at the current level of output, the marginal cost is $100 and marginal revenue is $41. In order to increase profit in the short run, a monopolist should
2. A monopoly sells its good in Country A, where the elasticity of demand (in absolute value) is 2, and in Country B, where the elasticity of demand (in absolute value) is 3. Its marginal cost is $20. Determine what price does the monopoly sells its good in each country if the monopolist is able to price discriminate. How and why does the price depend on the elasticity of demand?
2. Assume a monopolist sells a product with a total cost function equal to TC = 400 + Q². The market demand curve for the monopolist's product is P = 500 - Q. A. Find the profit-maximizing output and price for this monopolist. 3. Is the monopoly profitable? By how much? C. Calculate the price elasticity of demand at the monopolist's profit-maximizing price.
Lesson 5.6 - Monopoly and Output Pricing Decisions 1. A monopolist is a of the product it sells. , a seller that has the ability to control, to some degree, the price 2. The profit-maximizing monopolist produces the quantity of output at which and charges the 3. For the single-price monopolist, P. curve. 4. The single-price monopolist sells its output at a price higher than its marginal cost and, therefore, is not price per unit at which this quantity of output can be sold. MR; therefore, its demand curve lies the MR
Question No. 18 Refer to the Figure below. What price will the monopolist charge in order to maximize profit? 10 MC ATC 6. - AVC 3. MR 0 1 2 3 4 5 6 7 8 9 10 Quantity (units per day) Question No. 19 Refer to the above Figure in question 18. At the profit-maximizing what is price, output, and total revenue is? Question No. 20 Explain why only normal profit may be earned in the long run in perfect competition? Price(£ per unit)
Saved Suppose a monopolist faces the following demand curve. 70 60 50 40 30 20 10 10 20 30 40 50 60 70 Quantity The monopolist maximizes its profits by: Multiple Choice charging $70 for each unit. producing the level of output at which marginal revenue equals marginal cost. DII F2 F3 PrtScn F# F5 F6 F7 F8 $ & 3 5 7 8. Price ($)
1) If a monopolist is producing a quantity where marginal revenue is equal to $700 and the marginal cost is equal to $700, the monopolist should ________ to maximize profits. pickoneoption: a.decrease production and increase the price b. decrease production and decrease the price c. continue producing at the current price d. increase production and lower the price e. increase production and increase the price 2) In the long run, monopolistically competitive firms like fast-food restaurants operate at a price that pick one: a) drives economic profit to zero b. equals to the average variable cost. c. equals to the minimum average total cost. d. allows them to make a small economic profit. e. equals to the marginal cost.
1. At what output rate and price does the monopolist operate? 2. In equilibrium, approximately what is the firm’s total cost and total revenue? 3. What is the firm’s economic profit or loss in equilibrium?