2.Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1 hat is $12. The marginal cost of producing a second hat is $14 and the marginal cost of producing a third hat is $16. The market price of a hat is $14. To maximize profit, how many hats should Tammy produce everyday? option 1: 1 hat option 2: 2 hats option 3: 3 hats option 4: As many hats as possible 3.Which of the following is true for a natural monopoly? [More than 1 correct option] option 1: The firm can supply the entire market at a lower cost than two or more firms could. option 2: Its average total cost curve slopes upward as it intersects the demand curve option 3: The firm is not protected by any barrier to entry. 4.Deadweight loss occurs in Monopoly market because- [More than 1 correct option] option 1: Price charged by a monopolist is higher than perfectly competitive market option 2: A monopolist makes greater profit by producing at the minimum possible long-run average cost. option 3: For a monopoly market marginal benefit equals marginal cost.

2.Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1 hat is $12. The marginal cost of producing a second hat is $14 and the marginal cost of producing a third hat is $16. The market price of a hat is $14. To maximize profit, how many hats should Tammy produce everyday? option 1: 1 hat option 2: 2 hats option 3: 3 hats option 4: As many hats as possible 3.Which of the following is true for a natural monopoly? [More than 1 correct option] option 1: The firm can supply the entire market at a lower cost than two or more firms could. option 2: Its average total cost curve slopes upward as it intersects the demand curve option 3: The firm is not protected by any barrier to entry. 4.Deadweight loss occurs in Monopoly market because- [More than 1 correct option] option 1: Price charged by a monopolist is higher than perfectly competitive market option 2: A monopolist makes greater profit by producing at the minimum possible long-run average cost. option 3: For a monopoly market marginal benefit equals marginal cost.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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