fit maximizing monopoly will produce that output for which marginal cost equals
ID: 1119523 • Letter: F
Question
fit maximizing monopoly will produce that output for which marginal cost equals marginal revenue. b. average cost is minimized. c. d. marginal cost is minimized. marginal revenue equals price. If a monopoly is maximizing profits a. b. 2 price will always be greater than average cost. price will always equal marginal cost. price will always be greater than marginal cost. d. price will always equal marginal revenue. 3 The "deadweight loss" from a monopoly refers to the portion of a monopolist's profits that are above the competitive profit level. the loss of consumer surplus and produce surplus due to the monopolization of a market that is not transferred to another economic actor. the increase in price due to the monopolization of a market. the inefficient use of factors of production by a monopoly c. d. 4 A price discriminating monopolist having identical costs in two separated markets should charge a lower price in that market a. which has a higher demand which has a more elastic demand. which has a less elastic demand. which has a higher marginal revenue. d. ect (first degree) price discrimination extracts all consumer surplus. is not illegal. c makes the monopolist produce a quantity such that P-MC. d all of the above. e. none of the above. A monopolist has found that at the current level of output the price elasticity of demand is -0.5. Which of the following statements is true? 6 a The firm should cut output. c. d. The output level should not be altered. The firm should increase output. All of the above. Which of the following is (are) a condition(s) for third degree price discrimination? a. b. c. 7 Monopoly power. Different price elasticities of demand Separate markets. All of the above.Explanation / Answer
1. The right answer is option a. marginal cost equals marginal revenue.
Explanation: Similar to a competitive firm, a monopoly also earns the maximum profit when its marginal cost equals its marginal revenue.
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