A monopolist is able to maximize its profits by:
a. setting the price at the level that maximizes its per-unit profit
b. producing output where marginal revenue equals marginal cost and charging a price along the demand curve.
c. producing output where marginal revenue equals marginal cost and setting price at the demand curve's highest point.
d. producing output where price is equal to its marginal cost.
b
You might also like to view...
If the Federal Reserve lowers the Federal funds rate,
A) the price level falls. B) net exports decrease. C) other short-term interest rates rise. D) other short-term interest rates fall. E) Both answers A and C are correct.
A payment that is made by the government for which no goods or services are given in return is known as
A) a public good. B) a transfer payment. C) a negative externality. D) a free rider.
Which of the following is the best example of the substitution effect?
a. Joe buys fewer apples and more oranges as the result of an increase in the price of apples. b. Joe buys more apples when his income increases. c. Joe buys an apple slicer when the price of apples decreases. d. Joe buys less sugar as the result of an increase in price of apples.
According to the income effect, when the price of automobiles rises, people buy fewer automobiles because:
A. they substitute other forms of transportation for driving. B. the nominal amount of their paychecks is smaller. C. the purchasing power of their income is reduced. D. their demand for automobiles is very elastic.