The price-output combination that maximizes profits for a monopolist occurs at the point where
A) total revenues and total costs are equal.
B) the difference between total revenues and total costs is the greatest.
C) total revenues are the greatest.
D) the elasticity of demand equals one.
B
You might also like to view...
A lump-sum tax, such as a $1000 tax that every family must pay one time, is
A) negatively related to real GDP. B) an autonomous tax. C) a regressive tax. D) a type of income tax.
Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. Quick Burger Operates aDrive-Through WindowQuick Burger Does NotOperate Drive-Through WindowQuick Burger$24,000$15,000The Sunshine Café$11,000$23,000Suppose Quick Burger has the legal right to operate a drive-through window, and Quick Burger and the Sunshine Café can negotiate with each other at no cost. Which of the following arrangements would lead to the socially optimal outcome?
A. The Sunshine Café pays Quick Burger $10,500 per month not to operate the drive-through window. B. Quick Burger pays The Sunshine Café $10,500 per month to operate the drive-through window. C. The Sunshine Café pays Quick Burger $12,500 per month not to operate the drive-through window. D. Quick Burger pays The Sunshine Café $12,500 per month to operate the drive-through window.
As the housing bubble collapsed, the combination of increasing interest rates and pessimism about future economic prospects:
A. increased both consumption and investment spending. B. decreased both consumption and investment spending. C. increased consumption and decreased investment spending. D. decreased consumption and increased investment spending.
If reserves are __________ because of a temporary __________ in the Treasury's balance at the Fed, open market __________ may be used to offset such influences
A) falling; decline; sales B) rising; increase; sales C) rising; decline; sales D) rising; decline; purchases