If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits.
B) reduce output if it wants to maximize profits.
C) increase price and keep output unchanged if it wants to maximize profits.
D) increase output if it wants to maximize profits.
A
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Ellis, a staunch environmentalist, is hired right of graduate school by the Environmental Protection Agency. He is ecstatic about having the opportunity to promote what he believes to be the public interest
Within a few years he gets promoted to manager of his bureau. Shortly after his promotion he successfully argues for a 30 percent increase in his department's budget. How might Ellis benefit personally from an increased budget? Now suppose that it was known to be true that the best thing for the environment was for a large portion of Ellis' budget to be shifted to another department. Why might Ellis fight this change? Why might he not?
What is the term for a price index that measures average prices of all goods and services included in the economy?
a. Real value b. Nominal value c. GDP deflator d. GDP inflator
An increase in capital formation that expands long-run aggregate supply will
a. increase output and decrease prices. b. increase both output and prices. c. decrease both output and prices. d. decrease output and increase prices.
The Second Fundamental Theorem of Welfare Economics requires
A. that indifference curves be convex to the origin. B. that isoquants be concave to the origin. C. that there are no set prices for Pareto efficient allocations. D. that production be twice as large as consumption. E. all of these answer options are correct.