45. At the level of output where the marginal cost and marginal revenue curves i
ID: 1240766 • Letter: 4
Question
45.
At the level of output where the marginal cost and marginal revenue curves intersect, a monopolist's demand curve passes above its average total cost curve. The firm will:
A) shut down in the short-run.
B) increase its price.
C) stay in operation in the short-run, but shut down.
D) be able to make a pure economic profit.
87.
Exhibit 11-11 Labor wage and cost data
Labor
Wage
TWC
MFC
10
$
$ 50.00
$
11
5.80
12
17.80
13
102.70
14
126.00
15
46.50
In Exhibit 11-11, the wage required to hire 14 employees is equal to:
A) $8.80.
B) $9.50.
C) $9.00.
D) $5.50.
E) $8.10.
Exhibit 8-17 Marginal revenue and cost per unit curves
If the price of the firm's product in Exhibit 8-17 is $15 per unit, the firm should:
A) stay in operation for the time being even though it is making a pure economic loss.
B) shut down permanently.
C) continue to operate because it is earning a positive economic profit.
D) shut down temporarily.
9.
Exhibit 9-10 A monopolist
In Exhibit 9-10, the profit-maximizing or loss-minimizing output for the monopolist is:
A) 100 units per day.
B) 200 units per day.
C) 250 units per day.
D) 300 units per day.
E) 150 units per day.
10.
Exhibit 11-9 A labor market
If the labor market shown in Exhibit 11-9 is competitive, the wage rate and number of workers employed will be determined at point:
A) A.
B) C.
C) Y.
D) Z.
E) X.
27.
Exhibit 8-12 Marginal revenue and cost per unit curves
As shown in Exhibit 8-12, the price that will yield zero economic profit is:
A) OD.
B) OA.
C) OC.
D) OB.
30.
Exhibit 9-4 Demand and cost curves for a monopolist
As shown in Exhibit 9-4, in order to maximize its profit (or minimize its loss), how much output should the monopoly produce?
Labor
Wage
TWC
MFC
10
$
$ 50.00
$
11
5.80
12
17.80
13
102.70
14
126.00
15
46.50
Explanation / Answer
87. Since W = TWC/L you know that wages at 14 is 9. And since MFC at 9 is less than 46 you know that wages will increase when L increases. The only wage available is 9.50 so B
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