ECON 260 22. Even though a monopolist can use the market demand curve to determi

Question

ECON 260 22. Even though a monopolist can use the market demand curve to determine the highest price consumers are willing and able to pay for a specific quantity of output, however, in order to sell more of its product, a monopolist must a. lower its price. c. sell to the government. 23. Marginal revenue for revenue can become negative for a. both competitive and monopoly firms. c. competitive firms, but not for monopoly firms. d. monopoly firms, but not for competitive firms. use its market power to force up the price of complementary products. d. sell in international markets. b. a monopolist is computed as change in total revenue per one unit increase in quantity sold. Marginal b. neither competitive nor monopoly firms. 24. What is the monopolist's profit under the following conditions? The profift-maximizing price charged for goods produced is S12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is S6. Average total cost for 10 units of output is $5. a. $60. b. $70 c. $100. d. $120 25. By definition, a contestable market is an imperfectly competitive situation that is subject to entry. Even if there is only one producer of a particular good, the market may NOT be contestable because: a. New technology can make the current good obsolete. b. New technology cannot make the current good obsolete. c. Domestic firms can potentially enter the market. d. Foreign producers of the good can provide the good to the U.S. market 26. Private ownership of a monopoly may benefit society because the monopoly will have an incentive to a. lower its costs to earn a higher profit. b. price its good according to the intersection of marginal cost and average revenue. c. charge a price that prevents some people from buying. d. charge a price that is consistent with that of a benevolent social planner

Explanation / Answer

First question is answered below

1. Correct option: lower price

Reason: Since momopolists produce at the point MR = MC, they charge a very high price for their goods, which leads to low sales as not all consumers are able or willing to pay such high prices. Thus by lowering prices, it can cover more market and thus increase sales.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.