The following table provides information on the price, quantity, and average cost for a monopoly. At what price will the firm maximize its profit? ATC a. b. C. $1 $2 $3 P 5 4 3 2 1 0 Q 0 4 8 12 16 20 1.00 0.75 0.75 0.81 0.90

The following table provides information on the price, quantity, and average cost for a monopoly. At what price will the firm maximize its profit? ATC a. b. C. $1 $2 $3 P 5 4 3 2 1 0 Q 0 4 8 12 16 20 1.00 0.75 0.75 0.81 0.90

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1.
2.
A reduction in a monopolist's fixed costs would
a.
Decrease the profit-maximizing price and increase the profit-maximizing
quantity produced
Increase the profit-maximizing price and decrease the profit-maximizing
quantity produced
b.
C.
d.
The following table provides information on the price, quantity, and average cost
for a monopoly. At what price will the firm maximize its profit?
ATC
a.
b.
Not affect the profit-maximizing price or quantity
Possibly increase, decrease or not affect profit-maximizing price and
quantity, depending on the elasticity of demand
C.
d.
$1
$2
$3
$4
P
5
4
3
2
1
0
Q
0
4 1.00
0.75
0.75
0.81
8
12
16
20 0.90
-

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