Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 11R, Problem 18MCQ
To determine
The correct option for given situation where monopolist’s profit or loss can be defined if it charges
Expert Solution & Answer
Answer to Problem 18MCQ
Option a is correct answer.
Explanation of Solution
Explanation for correct option:
a.
Marginal revenue is greater than the marginal cost then monopolist can increase its profit by increasing production units as per the output rule. The firm will earn profit if MR >MC. Therefore, option a is correct.
Explanation for incorrect options:
b.
Since it will earn profit as MR>MC, there will be no losses. Therefore, option b is incorrect.
c.
Since, it is difficult to say that firm earns breakeven as the output level is not given. Therefore, option c is incorrect.
d.
If MR exceeds MC then profit can be maximized by increasing the output level for which firms must reduce the prices. Therefore, option d is incorrect.
e.
In
Economics Concept Introduction
Marginal revenue: MR refers to the revenue that is generated by the firm by selling one additional unit in the market.
Chapter 11R Solutions
Krugman's Economics For The Ap® Course
Ch. 11R - Prob. 1MCQCh. 11R - Prob. 2MCQCh. 11R - Prob. 3MCQCh. 11R - Prob. 4MCQCh. 11R - Prob. 5MCQCh. 11R - Prob. 6MCQCh. 11R - Prob. 7MCQCh. 11R - Prob. 8MCQCh. 11R - Prob. 9MCQCh. 11R - Prob. 10MCQ
Ch. 11R - Prob. 11MCQCh. 11R - Prob. 12MCQCh. 11R - Prob. 13MCQCh. 11R - Prob. 14MCQCh. 11R - Prob. 15MCQCh. 11R - Prob. 16MCQCh. 11R - Prob. 17MCQCh. 11R - Prob. 18MCQCh. 11R - Prob. 19MCQCh. 11R - Prob. 20MCQCh. 11R - Prob. 21MCQCh. 11R - Prob. 22MCQCh. 11R - Prob. 23MCQCh. 11R - Prob. 24MCQCh. 11R - Prob. 25MCQCh. 11R - Prob. 1FRQCh. 11R - Prob. 2FRQCh. 11R - Prob. 3FRQCh. 11R - Prob. 1CTQCh. 11R - Prob. 2CTQCh. 11R - Prob. 3CTQ
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