A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. Now suppose that the country in which this monopolist is located decides to engage in international trade. The world price of the product produced by the monopolist is $12. What is its profitmaximizing price?
a. $20
b. $15
c. $12
d. $10
Ans: c. $12
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Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is $15, the firm will
A) shut down. B) leave the market in the long run. C) stay in the market in the long run. D) make an economic profit.
Refer to Table 1-5. What is Julius's marginal cost if he decides to stay open for three hours instead of two hours?
A) $0 B) $18 C) $54 D) $65
Between 1980 and the early 1990s, the national debt
a. as a percentage of GDP, decreased b. remained fairly constant c. as a percentage of GDP, remained relatively unchanged d. as a percentage of GDP, increased e. declined
Marginal productivity analysis shows that a drop in the price of the product will cause input use to
a. increase. b. decrease. c. stay the same. d. The information is insufficient to provide an answer.