-27. A monopoly may arise due to A. a patent B. large economies of scale C. a tr
ID: 1208655 • Letter: #
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-27. A monopoly may arise due to A. a patent B. large economies of scale C. a trademark all of the above 28. At a price orso, the marginal revenue ofa monopolist is production is $8, what should the monopolist do in order to maximize At a price of S10,the marginal revenue of a monopolist is S6. If the marginal cost of profits? A. Increase its price. B. Decrease its price C. Keep its price at the same level. D. Increase its output. 29. If rural ones, this is an example of an electric company charges different prices for its city customers than it does for its A. First degree price discrimination. degree price discrimination. d degree price discrimination. D. Fourth degree price discrimination. 30. No matter what type of firm we are talking about (perfectly competitive, monopoly, or monopolistic competition) the rule for profit maximization will be to produce the quantity where. A. Price Average Cost B. Price = Marginal Cost C. Total Revenue= Total Cost D. Marginal Revenue Marginal Cost Table 1(Question 31 & 32) Number of Fis TVC MC AVC RC TC ATC 90 90 135 80 400 31. Refer to the Table I. Table I presents the cost schedule for David's Figs. If David produces two figs, David's average variable costs are: A. $80. B. $85. C. $90. D. $170. 8Explanation / Answer
27) D
28) A. Since profit maximisation for the monopolist is MR=MC, and monopolist has a free hand in Price.
29) C
30) D
31) B
ATC= TC/ no.of fig
135= TC/2 => TC=270 and FC= 100 we no TC= TF+ TVC
TVC= 170 AVC=TVC/No.of fig AVC= 85
32) D
33) B, Profit = TR-TC
Profit= (40,000*20)-30
34) B, In long run Price= MC is the equilibrium point for a perfect competitive firm
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