What is the profit-maximizing rule for a monopolist?
What will be an ideal response?
A profit-maximizing monopolist will continue to increase production as long as marginal revenue is greater than marginal cost. Thus, maximum profit occurs where marginal revenue is equal to marginal cost. Incidentally, it is worth noting that this profit-maximizing rule applies to all firms no matter the market structure that it operates in.
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In the short run, a firm might choose to produce rather than shut down even if its market price is less than its average total cost of production
Indicate whether the statement is true or false
You view tea and scones as perfect complements, and the corners of the indifference curves lie on the 45-degree line. Tea is plotted along the horizontal axis of the indifference map
Also, at your current point of consumption, you have not fully exhausted the available budget, and you consume more tea than scones. Based on this information, which of the following statements is NOT true? A) The marginal utility of tea equals zero for your current consumption bundle. B) The marginal utility of scones equals zero for your current consumption bundle. C) To reach the point of optimal consumption, you must increase your scone consumption. D) The equal marginal principle does not have to be satisfied at the optimal consumption point for this problem.
Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000 . If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
a. $10,000. b. $25,000. c. $30,000. d. $45,000. e. $70,000.
Despite the monies spent by the federal and state governments, many observers believe which of the following?
a. public infrastructure such as bridges and roads is only adequate b. our educational system is lacking c. not enough monies are spent on homeland defense d. all of these are correct