A monopoly is producing a level of output at which price is $80, marginal revenue is $40, average total cost is $100, marginal cost is $40, and average fixed cost is $10. In order to maximize profit, the firm should
A. produce more.
B. produce less.
C. keep output the same.
D. shut down.
Answer: D
You might also like to view...
Barriers that prevent workers from entering particular labor markets
a. decrease wage rates in those markets b. increase employment in those markets c. decrease discrimination in those markets d. increase profits in those markets e. increase wage rates in those markets
Suppose a consumer has an income of $16, the price of A is $2, and the price of B is $1. Which of the following combinations is on the consumer's budget line?
A. 4A and 9B B. 5A and 6B C. 6A and 6B D. 3A and 8B
Lee and Cody are playing a game in which Lee has the first move at A in the decision tree shown below. Once Lee has chosen either aggression or cooperation, Cody, who can see what Lee has chosen, must choose either aggression or cooperation at B or C. Both players know the payoffs at the end of each branch. 
If Lee chooses aggression, Cody will respond with ________, and if Lee chooses cooperation, Cody will respond with ________.
A. cooperation; aggression B. aggression; cooperation C. cooperation; cooperation D. aggression; aggression
The concept that suggests the consumption of the first few units of any good tends to bring a higher level of utility to a person than consumption of later units is the:
a. law of diminishing marginal utility. b. law of supply. c. law of demand. d. law of consumption.