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Assume that a monopolist faces the demand schedule given in the-(Answered)

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Assume that a monopolist faces the demand schedule given in the table below and a constant marginal cost of $50 for each unit of output. To maximize profits, the monopolist would produce ____ units of output at a price of ____ per unit. ( see attached pic )

  • 5,000; $50

  • 4,000; $60

  • 3,000; $70

  • 2,000; $80

2/ Assume that a monopolist faces the demand schedule given below, and a constant marginal cost of $2 for each unit of output. To maximize profits, this monopolist would produce ____ units of output and charge a price of ____ per unit.

Price

Quantity Demanded

$10

0

$8

1

$5

2

$3

3

$1

4

A.1 units; $8 per unit

B .2 units; $5 per unit

C. 3 units; $3 per unit

D. 4units; $1 per unit

3/Suppose that at the current level of production, the price of a monopolist?s product is equal to $15 per unit. Marginal revenue is equal to $10 per unit, and marginal cost is equal to $15 per unit. This monopoly

  • has maximized profit and should keep production the same.

  • can increase its profit by producing and selling more units of its product.

  • can increase its profit by producing and selling fewer units of its product.

  • More information is needed to answer this question.

4/ Over the long run, a monopolist

  • cannot continue to make profits and will earn a loss

  • can continue to make economic profits if it can maintain a monopoly and keep competitors from entering the market

  • will not make a profit or a loss but will operate at zero economic profit

5/ Monopolies lead to

  • rent seeking.

  • deadweight loss.

  • an efficient outcome.

  • Both A and B are true.

6/ Monopolies choose their profit maximizing:

  • Output level

  • Price

  • Output level and Price

  • Neither output level nor price

 

Paper#9255783 | Written in 27-Jul-2016

Price : $16
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