Top Glove Company is a Malaysian rubber glove manufacturer that specializes in face masks, dental dams, and other products. The company owns and operates 47 manufacturing facilities in Malaysia, Thailand, China, and Vietnam. If Top Glove company is acted as an unregulated monopoly and finds that currently, its marginal cost (MC) is more than its marginal revenue (MR). In order to increase its profit, the firm will need; O a. to continue to produce this level of output. O b. to raise its price and increase its output. O c. to raise its price and decrease its output.

Top Glove Company is a Malaysian rubber glove manufacturer that specializes in face masks, dental dams, and other products. The company owns and operates 47 manufacturing facilities in Malaysia, Thailand, China, and Vietnam. If Top Glove company is acted as an unregulated monopoly and finds that currently, its marginal cost (MC) is more than its marginal revenue (MR). In order to increase its profit, the firm will need; O a. to continue to produce this level of output. O b. to raise its price and increase its output. O c. to raise its price and decrease its output.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 4E

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Market Power and Monopoly - End of Chapter Problem Green Machine is the only greenhouse in isolated Point Barrow, Alaska, and therefore has a monopoly on the sale of fresh flowers. The manager estimates that the elasticity of demand for flowers is -0.5. Green Machine cannot be maximizing profits because O it is operating in the inelastic portion of its demand curve, so it can increase price and still gain more revenue while lowering cost. This will increase profits. according to the Lerner index an elasticity of demand of -0.5 means Green Machine's markup is 50% higher than what it should be, so it needs to decrease price and increase sales. elasticity of demand is negative; therefore, Green Machine's total costs are higher than its total revenue, and profits are not being maximized. O its marginal revenue must be greater than its marginal cost when elasticity of demand is between 0 and -1, so profits are not being maximized and it must expand production to increase sales and lower…
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