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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

• rent seeking.

• 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

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