Suppose a monopolist's costs and revenues are as follows: ATC = $45.00; MC = $40.00; MR = $40.00; P = $45.00. The firm should
A. decrease output and increase price.
B. increase output and decrease price.
C. not change output or price.
D. shut down.
Answer: C
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If one firm in a duopoly increases its production by one unit beyond the monopoly output, that firm's profit ________, the other firm's profit ________, and the total profit of the duopoly ________
A) increases; increases; increases B) does not change; does not change; does not change C) increases; decreases; does not change D) increases; does not change; increases E) increases; decreases; decreases
Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Walmart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store,
often go out of business because they lose customers. This story demonstrates that a. consumers are boycotting local retailers b. Wal-Mart engages in illegal acts of monopolization c. there are diseconomies of scale in retail sales d. there are economies of scale in retail sales e. Wal-Mart is managed by ruthless business people
Suppose you received a 5 percent increase in your nominal wage. Over the year, inflation ran about 2 percent. Which of the following is true?
a. Your real wage fell. b. Your nominal wage fell. c. Both your nominal and real wages decreased. d. Although your nominal wage fell, your real wage increased. e. Both your nominal and real wages increased.
What type of statement is a prescriptive statement about how the world ought to be?