MC ATC Demand MR 0 E LM 47. Quantity Refer to the diagram. To maximize profits o
ID: 1115984 • Letter: M
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MC ATC Demand MR 0 E LM 47. Quantity Refer to the diagram. To maximize profits or minimize loses,this firm should produce: A. E units and charge price C. B. E units and charge price A. C. M units and charge price N. D. L units and charge price LK 48. The higher prices charged by monopolists: A. are like a private tax that redistributes income from consumers to monopoly sellers. B. are socially optimal because they better reflect how much society values the good relative to the resc used to produce it. C. return to consumers through the public goods provided by monopolies. D. have no effect on the distribution of income. 49. Price discrimination refers to: A. selling a given product for different prices at two different points in time. B. any price above that which is equal to a minimum average total cost. C. the selling of a given product at different prices to different customers that do not reflect cost differ D. the difference between the prices a purely competitive seller and a purely monopolistic seller would 50. Price discrimination refers to: A. selling a given product for different prices at two different points in time. B. any price above that which is equal to a minimum average total cost. C. the selling of a given product at different prices to different customers that do not reflect cost differ D. the difference between the prices a purely competitive seller and a purely monopolistic seller woulExplanation / Answer
47)B – To maximize its profit a monopolist will sell the product at quantity where Marginal revenue curve intersects with the Marginal cost curve i.e at point E and as the product has no close substitute and the people are ready to give any price for the product , the monopolist will charge price as high as point A where the quantity line touches the demand curve through the point of intersection of the MR and MC curve.
48) A –Yes its nearly like a private tax that redistributes income from buyer to sellers, actually the monopolist charges a price above its marginal cost of production therefore, the consumer have to pay an extra portion of their income to gain the product, above its MC and this amount results in additional profit of the sellers, that is increase in their income.
49) C – Price discrimination refers to selling of same products having same cost to different consumers at different price. This strategy is most commonly used by Monopolists to earn high profit, they select their different types of customers , one type includes those who are willing to pay any price for that product and they are quite snobbish in nature. Another category are the common people who are not so interested in the product so for them the product price will be kept low.
50) C - Price discrimination refers to selling of same products having same cost to different consumers at different price. This strategy is most commonly used by Monopolists to earn high profit, they select their different types of customers , one type includes those who are willing to pay any price for that product and they are quite snobbish in nature. Another category are the common people who are not so interested in the product so for them the product price will be kept low.
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