Question :
61) A single-price monopoly has marginal cost of $23 and : 1238798
61) A single-price monopoly has marginal cost of $23 and marginal revenue of $28. Which of the following is definitely correct?
A) It is maximizing profit.
B) To increase profit, it should produce less.
C) To increase profit, it should produce more.
D) It should shut down.
E) It is making an economic profit.
62) A profit-maximizing output for a single-price monopoly is determined by the intersection of the ________ curves and the profit-maximizing price is found on the ________ curve.
A) marginal cost and marginal revenue; marginal revenue
B) marginal cost and marginal revenue; demand
C) total revenue and total cost; total revenue
D) marginal cost and average total cost; demand
E) demand and supply; supply
63) For a single-price monopoly,
A) if marginal cost exceeds marginal revenue, profits will increase if output decreases.
B) if marginal revenue exceeds marginal cost, profits will increase if output decreases.
C) there are several different price and output combinations that maximize profit.
D) marginal revenue will be greater than price if demand is elastic.
E) marginal revenue will be greater than price if demand is inelastic.
64) A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38. At this output, average total cost is $15. What is the total profit earned?
A) $225
B) $285
C) $345
D) $570
E) $19
65) A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38. What is the firm’s total revenue?
A) $38
B) $285
C) $570
D) $19
E) There is not enough information given to answer the question.
66) If a single-price monopoly is making a large economic profit, what keeps other firms from competing away the profit?
A) There are barriers to entry.
B) The monopoly must be keeping the amount earned secret.
C) The market must be too small.
D) The existing firm’s ATC must be too large to allow competitors to enter and earn an economic profit.
E) Nothing, other firms will enter and will compete away the profit.
67) In contrast to competitive firms, single-price monopolies
A) do not have to worry about market demand.
B) sell only if demand is inelastic.
C) can never incur a loss.
D) can make an economic profit indefinitely.
E) must take the price that is determined by the market demand and market supply.
68) A monopolist can make an economic profit in the long run because of
A) the relatively elastic demand for its product.
B) the relatively inelastic demand for its product.
C) the firm’s price setting behavior.
D) barriers to entry.
E) the fact that the firm produces where MR = MC.
69) Why can a monopoly make an economic profit in the long run?
A) because there are close substitutes for the firm’s product
B) because the firm is protected by barriers to entry
C) because the firm produces where MR=MC
D) because P > MR
E) All of the above are reasons why a monopoly can make an economic profit in the long run.
70) For a single-price monopoly, price is
A) greater than marginal revenue.
B) one half of marginal revenue.
C) equal to marginal revenue.
D) unrelated to marginal revenue.
E) always less than average total cost when the firm maximizes its profit.
71) A single-price monopoly can sell 1 unit for $9.00. To sell 2 units, the price must be $8.50 per unit. The marginal revenue from selling the second unit is
A) $17.50.
B) $17.00.
C) $8.50.
D) $8.00.
E) $9.00
72) When demand is elastic, marginal revenue is
A) positive.
B) negative.
C) zero.
D) increasing as output increases.
E) undefined.
73) To maximize its profit, a single-price monopoly produces the quantity at which
A) the difference between marginal revenue and marginal cost is as large as possible.
B) marginal revenue equals marginal cost.
C) average total cost is at its minimum.
D) the marginal cost curve intersects the demand curve.
E) the marginal revenue curve intersects the horizontal axis.
74) Once a monopoly has determined how much it produces, it will charge a price that
A) is determined by the intersection of the marginal cost and average total cost curves.
B) minimizes marginal cost.
C) is determined by its demand curve.
D) is independent of the amount produced.
E) is equal to its average total cost.
