Question : 31) Allegiant Air holds a natural monopoly most of the : 1238795

31) Allegiant Air holds a natural monopoly on most of the routes it serves in the United States. Allegiant Air ________ operate on the ________ portion of its demand curve when total revenue is ________.

A) will always; elastic; increasing

B) will usually; elastic; decreasing

C) will never; elastic; increasing

D) will always; inelastic; increasing

E) will never; inelastic; increasing

32) Use the figure above to answer this question. Mary is the only veterinarian in a small town. To maximize her profit, Mary will choose to treat ________ animals per hour and charge ________ per customer in order to ________.

A) 4; $50; maximize profit

B) 6; $20; maximize profit

C) 6; $30; minimize average total cost

D) 4; $50; operate on the inelastic portion of her demand curve

E) 6; $20; minimize cost in order to attract more customers

33) Use the figure above to answer this question. Mary is the only veterinarian in a small town and rents a space for her practice. If Mary’s landlord decided to charge ________ per hour in rent, Mary would ________.

A) $20 more; earn $0 economic profit

B) $20 more; still earn an economic profit because she is a monopolist

C) $30 more; earn $0 economic profit

D) $10 less; raise her prices and earn a higher profit

E) $30 more; operate on the inelastic portion of her demand curve

34) If the single restaurant in an Eastern Kentucky town is currently charging a price for its ham and eggs where the demand is unit elastic, its marginal revenue for ham and eggs is

A) negative.

B) positive.

C) zero.

D) maximized.

E) undefined.

35) Suppose that along a linear demand curve, the elasticity of demand is equal to 1 when the price is $4 and the quantity is 100 units. Then the

A) total revenue is at its maximum when 100 units are produced.

B) marginal revenue is positive at 100 units.

C) marginal revenue is negative at 100 units.

D) Both answers A and B are correct.

E) Both answers A and C are correct.

36) Suppose that along a linear demand curve, the elasticity of demand is equal to 1 when the price is $4 and the quantity is 100 units. Then the

A) marginal revenue is negative when output exceeds 100 units.

B) elasticity of demand is less than 1 when output exceeds 100 units.

C) marginal revenue is 0 when output equals 100 units.

D) Only answers A and B are correct.

E) Answers A, B, and C are correct.

37) The above table gives the demand schedule for a monopoly. The demand is elastic at all prices between

A) $6 and $1.

B) $5 and $1.

C) $3 and $1.

D) $6 and $4.

E) $4 and $3.

38) The above table gives the demand schedule for a monopoly. The demand is inelastic over the entire price range between

A) $6 and $1.

B) $5 and $1.

C) $3 and $1.

D) $6 and $4.

E) $4 and $3.

39) To maximize its profit, a single-price monopoly produces the amount of output so that its marginal revenue

A) equals zero.

B) equals its marginal cost.

C) exceeds its marginal cost but not necessarily by as much as possible.

D) is less than its marginal cost.

E) exceeds its marginal cost by as much as possible.

40) The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

A) marginal revenue equals marginal cost.

B) price equals marginal cost.

C) it can charge the highest possible price.

D) marginal revenue exceeds marginal cost by as much as possible.

E) total revenue equals total cost.