Answer the following questions true (T) or false (F)
1. To maximize profit, a monopolist will produce and sell a quantity such that for the last unit sold, marginal revenue equals marginal cost, and charges a price given by the demand curve at that output level.
2. A monopolist's demand curve is the same as the marginal revenue curve for the product.
3. If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43, then the incremental profit from the last unit sold is $7.
1. TRUE
2. FALSE
3. FALSE
You might also like to view...
A bride accepting a proposal only if the ring is expensive enough is a
a. Screening mechanism b. Signaling mechanism c. Way to waste money d. None of the above
An individual will never buy complete insurance if
a. he or she is risk averse. b. he or she is a risk taker. c. insurance premiums are fair. d. under any circumstances.
A positive rate of time preference means that
a. time is relative to consumption b. consumption in the future is more important than consumption today c. consumption today is valued less than consumption in the future d. consumption in the future is valued less than consumption today e. consumption in the future and consumption today are positively related
The vicious circle of poverty refers to a condition where
a. people are poor because they cannot invest in capital goods and they cannot invest in capital goods because they are poor b. people who borrow money at high interest rates can never get out from under the indebtedness created c. people invest in unprofitable projects and keep pouring loanable funds into those projects in the hope of salvaging them d. people prefer consumption goods to capital goods so there are insufficient capital goods to propel the economy out of poverty e. poverty is relative and poor people remain poor because the wealthy grow wealthier