Question :
31) A price maker is
A) a person who actively seeks : 1244608
31) A price maker is
A) a person who actively seeks out the best price for a product that he or she wishes to buy.
B) a firm that has some control over the price of the product it sells.
C) a firm that is able to sell any quantity at the highest possible price.
D) a consumer who participates in an auction where she announces her willingness to pay for a product.
32) Firms that face downward-sloping demand curves for their output in the product market are called
A) price takers.
B) price dictators.
C) monopolists.
D) price makers.
33) Wendell can sell five motor homes per week at a price of $22,000. If he lowers the price of motor homes to $20,000 per week he will sell six motor homes. What is the marginal revenue of the sixth motor home?
A) $10,000
B) $12,000
C) $20,000
D) $22,000
Figure 10-5
34) Refer to Figure 10-5. If the monopolist charges price P* for output Q*, in order to maximize profit or minimize loss in the short run, it should
A) continue to produce because price is greater than average variable cost.
B) shut down because price is greater than marginal cost.
C) shut down because price is less than average total cost.
D) continue to produce because a monopolist always earns a profit.
Table 10-2
Quantity per Day (cases)
Price per Case
Total Cost
1
$16
$7.00
2
15
9.50
3
14
11.00
4
13
12.00
5
12
14.50
6
11
17.50
7
10
21.00
8
9
25.00
9
8
30.00
10
7
35.50
The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 10-2 shows the cost and demand data for this government protected monopolist.
35) Refer to Table 10-2. What is the profit-maximizing quantity and price for the monopolist?
A) Quantity = 8 cases, Price = $9
B) Quantity = 7 cases, Price = $10
C) Quantity = 9 cases, Price = $8
D) Quantity = 10 cases, Price = $7
36) Refer to Table 10-2. What is the amount of profit that the firm earns?
A) $34.50
B) $42
C) $47
D) $49
Figure 10-6
Figure 10-6 shows the cost and demand curves for a monopolist.
37) Refer to Figure 10-6. The profit-maximizing output and price for the monopolist are
A) output = 62; price = $24.
B) output = 62; price = $18.
C) output = 83; price = $22.
D) output = 104; price = $20.80.
38) Refer to Figure 10-6. The monopolist’s total revenue is
A) $1,116.
B) $1,488.
C) $1,726.40
D) $1,826.
39) Refer to Figure 10-6. The monopolist’s total cost is
A) $1,116.
B) $1,240.
C) $1,660.
D) $1,726.40.
40) Refer to Figure 10-6. The monopolist earns a profit of
A) $0.
B) $170.
C) $248.
D) $372.
Table 10-3
Price
Quantity
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
$17
3
$51
—–
$56
—–
16
4
64
$13
63
$7
15
5
75
11
71
8
14
6
84
9
80
9
13
7
91
7
90
10
12
8
96
5
101
11
Assume Table 10-3 gives the monthly demand and costs for subscriptions to basic cable for Comcast, a cable television monopoly in Philadelphia.
