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7. At price OG, the area of which rectangle represents total revenue for the profit-maximizing per- fect competitor? (A) OGKC (B) OFIC (C) FGKJ (D) EFJH 8. At output OC, total variable cost is represented by the area of which rectangle? (C) OEHC (A) OGKC (B) FGK) (D) OFIC 9. At price OG, profits for the perfect competitor are represented by the area of which rectangle? (A) OGKC (B) OFIC (C) FGKJ (D) OEHC

7. At price OG, the area of which rectangle represents total revenue for the profit-maximizing per- fect competitor? (A) OGKC (B) OFIC (C) FGKJ (D) EFJH 8. At output OC, total variable cost is represented by the area of which rectangle? (C) OEHC (A) OGKC (B) FGK) (D) OFIC 9. At price OG, profits for the perfect competitor are represented by the area of which rectangle? (A) OGKC (B) OFIC (C) FGKJ (D) OEHC

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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part 7 8 9

A Quick Review of Perfect Competition and Monopoly Figure 39.1 Graphs of Monopoly and Perfect Competition Monopoly Perfect Competition R MC ATC MC ATC AVC K D= MR (G .M. H. MR E LM QUANTITY A B D QUANTITY These questions are based on Figure 39.1. Underline the correct answer. Assume that the monopoly can set only one price. Both the monopoly and the perfect competitor seek to maximize profits. 1. A monopoly firm will maximize profits at what price? (B) OB (A) OA (C) OC (D) OR 2. Economic profits for the monopoly firm are represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJN 3. Total costs for the monopoly firm are represented by the area of which rectangle? (A) BKLO (B) CGEO (C) AJEO (D) BHEO 4. The total revenue for the monopoly firm is represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJH 5. The perfect competitor will maximize profits at what output level? (в) ов (A) OA (C) 0G (D) OD COSTS/REVENUE (DOLLARS) ------- COSTS/REVENUE (DOLLARS)
Transcribed Image Text:A Quick Review of Perfect Competition and Monopoly Figure 39.1 Graphs of Monopoly and Perfect Competition Monopoly Perfect Competition R MC ATC MC ATC AVC K D= MR (G .M. H. MR E LM QUANTITY A B D QUANTITY These questions are based on Figure 39.1. Underline the correct answer. Assume that the monopoly can set only one price. Both the monopoly and the perfect competitor seek to maximize profits. 1. A monopoly firm will maximize profits at what price? (B) OB (A) OA (C) OC (D) OR 2. Economic profits for the monopoly firm are represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJN 3. Total costs for the monopoly firm are represented by the area of which rectangle? (A) BKLO (B) CGEO (C) AJEO (D) BHEO 4. The total revenue for the monopoly firm is represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJH 5. The perfect competitor will maximize profits at what output level? (в) ов (A) OA (C) 0G (D) OD COSTS/REVENUE (DOLLARS) ------- COSTS/REVENUE (DOLLARS)
6. The perfect competitor will shut down below which price-output relationship? (A) K (C) L (B) M (D) R 7. At price OG, the area of which rectangle represents total revenue for the profit-maximizing per- fect competitor? (A) OGKC (B) OFJC (C) FGKJ (D) EFJH 8. At output OC, total variable cost is represented by the area of which rectangle? (A) OGKC (B) FGKJ (C) OEHC (D) OFIC 9. At price OG, profits for the perfect competitor are represented by the area of which rectangle? (C) FGKJ (A) OGKC (B) OFJC (D) OEHC 10. At what price-output relationship will a perfect competitor operate in the long run? (A) K (B) L (C) M (D) R 11, For the monopolist, what is the area of consumer surplus? (B) AJGC (A) ABHJ (C) ARJ (D) ARJE
Transcribed Image Text:6. The perfect competitor will shut down below which price-output relationship? (A) K (C) L (B) M (D) R 7. At price OG, the area of which rectangle represents total revenue for the profit-maximizing per- fect competitor? (A) OGKC (B) OFJC (C) FGKJ (D) EFJH 8. At output OC, total variable cost is represented by the area of which rectangle? (A) OGKC (B) FGKJ (C) OEHC (D) OFIC 9. At price OG, profits for the perfect competitor are represented by the area of which rectangle? (C) FGKJ (A) OGKC (B) OFJC (D) OEHC 10. At what price-output relationship will a perfect competitor operate in the long run? (A) K (B) L (C) M (D) R 11, For the monopolist, what is the area of consumer surplus? (B) AJGC (A) ABHJ (C) ARJ (D) ARJE
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