A monopoly maximizes its profits using what rule?
a. P = ATC
b. MR = ATC
c. Q = MC
d. MR = MC
e. pick the highest price possible, as long as some units still sell
d. MR = MC
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From this chapter we know that a profit maximizing competitive firm will set its price equal to the market price. Briefly describe why a profit maximizing competitive firm will not set its price above the market price. Also, describe why a profit maximizing competitive firm will not set its price below the market price.
What will be an ideal response?
The slope of a vertical line is
a. infinitely large b. zero c. positive d. negative e. infinitely small
When the price of a resource is set below equilibrium,
a. excess demand for the resource will occur. b. excess supply of the resource will result. c. the supply of the resource will be inelastic. d. the demand for the resource will be inelastic.
A monopoly does not have a supply curve
Indicate whether the statement is true or false