Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 12.4, Problem 3QQ
To determine
Economic profit.
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When a monopolist switches from charging a singleprice to practicing perfect price discrimination, itreducesa. the quantity produced.b. the firm’s profit.c. consumer surplus.d. total surplus.
For a monopolist,
a. price is always less than the MC of the good.
b. marginal revenue is always less than the price of the good.
c. marginal cost is always greater than average total cost.
d. marginal revenue equals marginal cost at the point where total revenue is maximized.
In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short run marginal cost and price is:
A. Greater than average total costB. Less than average total costC. Greater than average variable cost
D. Less than average variable cost
Chapter 12 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- For a monopolist to produce one more unit of output, Select one: a. the price must be equal to the marginal cost b. the difference of total revenue gained and total revenue lost must be greater than zero c. the price must be equal to the average variable cost. d. demand must be in the in inelastic range of the demand curve e. the difference of the price and marginal revenue must be equal to zeroarrow_forwardCurrently, a monopolist's profit-maximizing output is 400 units per week and it sells its output at a price of S60 per unit. The firm's total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40 in extra revenue from the sale of the last unit produced each week. a. What are the firm's weekly economic profits? b. What is the firm's marginal cost? c. What is the firm's average total cost?arrow_forwardIf a monopolist's marginal revenue is $3.00 and its marginal cost is $4.00, it will increase its profits by: A. reducing output and raising price B. Reducing both output and price C. Increasing both output and price D. Raising price while keeping output unchangedarrow_forward
- It is possible for a monopolist's to earn economic profits even in the long run due to: a. its barriers to the entry of other firms. b. the nature of the monopolist's product. c. its practice of third-degree price discrimination.arrow_forwardWhich of the following is true for a monopolist that engages in perfect price discrimination? a. There is more consumer surplus than exists with a regular monopoly. b. The firm sells the profit-maximizing quantity of the regular monopolist but charges each consumer a price higher than the regular monopoly price. c. The monopolist sells the allocatively efficient quantity of output. d. The monopolist further restricts output compared to the regular monopoly, creating greater deadweight loss. e. The monopolist no longer faces a downward-sloping demand curve, becoming a price taker.arrow_forwardA monopolist that operates the first-degree price discrimination (Select all that applies; there may be more than one answer) a. charges each consumer the maximum price the consumer is willing to pay. b. creates deadweight loss, like any other monopoly. c. drives the consumer surplus to zero. d. produces the perfectly competitive level of output. e. earns zero profit.arrow_forward
- For a monopolist, pricing the output where the demand is relatively inelastic, Select one. C. a. leads to a decline in total revenues. Ob. increases economic profits. increases its market power, as.consumers wilinot respond to price changes. d. total revenue is maximizedarrow_forwardExercise 3.3. Suppose a profit-maximizing monopolist is producing 800 units of output and is charging a price of $40 per unit. a. If the elasticity of demand for the product is -2, find the marginal cost of the last unit produced. b. What is the firm's percentage markup of price over marginal cost? c. Suppose that the average cost of the last unit produced is $15 and the firm's fixed cost is $2000. Find the firm's profit.arrow_forwardFor a monopolist, pricing the output where the demand is relatively inelastic Select one. C. a. leads to a decline in total revenues. b. increases economic profits. increases its market power, as.consumers wUnot respond to pricechanges d. total revenue is maximizedarrow_forward
- In maximizing economic profit, the monopolist willSelect one:a equate marginal revenue to marginal cost.b. equate price to marginal cost.c. choose the highest price that still permits some output sales.d. equate marginal cost to minimum average total cost.arrow_forward30. A monopolist will spend resources to advertise its product so long as A) net profits increase.B) gross profits increase.C) demand increases.D) total revenue increases.arrow_forwardNeed help.arrow_forward
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