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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Answer these three mcq questions correctly.
![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff6300abe-9462-401d-a1ec-1be24df95454%2F22e5f65d-538d-4f86-8f30-c2aec910fe3f%2Fvj4nqwt_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
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