To maximize profit a perfectly competitive firm supplies a good up to the point at which
A. the marginal revenue is higher than the marginal cost.
B. the marginal cost of producing the good is zero.
C. the average revenue equals average cost.
D. the price of the good equals marginal cost.
Answer: D
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Suppose that a monopolist is producing an output level of 10,000 units. At that output level, both MR and MC equal $5, AR equals $7, and ATC equals $6. Which of the following statements is correct?
a. the firm is maximizing its total profit, which equals $10,000. b. total cost equals $60,000. c. total revenue equals $70,000. d. All of these.
Refer to the table above. Country B has absolute advantage in
A) Good X. B) Good Y. C) Neither X nor Y. D) Both X and Y.
According to the above figure, the profit maximizing price-output combination for the monopolist is a price of
A. 60 cents and an output of 30,000 newspapers per day. B. 50 cents and an output of 40,000 newspapers per day. C. 30 cents and an output of 30,000 newspapers per day. D. 45 cents and an output of 45,000 newspapers per day.
For a monopoly to be a natural monopoly,
A. there must be constant returns to scale. B. the long-run average cost curve must continue to increase until it hits the market demand curve. C. economies of scale must be realized at a scale that is small relative to the market. D. economies of scale must be realized at a scale that is close to total demand in the market.