At his current level of output, a monopolist has a MR of $10, a MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve is upward sloping, the monopolist:
a. is producing at the profit-maximizing level of output
b. could increase profit by increasing output.
c. could increase profit by increasing his price.
d. should exit the market if significant fixed costs have been incurred.
b
You might also like to view...
Which of the following is NOT a problem in the implementation of industrial policies?
A) Choosing the industry to target B) Knowing the optimum amount of resources to provide the targeted industry C) The encouragement of rent seeking by firms in other industries D) The benefits are partly captured by foreign firms. E) All of the above are problems.
A subgame-perfect equilibrium is a Nash equilibrium that
a. cannot persist through several periods. b. involves only credible threats. c. consists only of dominant strategies. d. is unique.
The federal funds rate is the interest rate:
a. On U.S. interbank loans. b. The Federal Reserve changes banks that borrow from it. c. The World Bank charges to central banks. d. Central banks charge individuals. e. U.S. financial institutions pay to their best (i.e., largest) depositors.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower