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Your answer Micro test 10
1) For a monopolist that is maximizing profits,
A) price exceeds marginal cost.
B) price equals marginal revenue.
C) price equals average total cost.
D) marginal revenue exceeds price.
2) A monopoly will maximize profits at the level of output at which
A) MR = MC.
B) MR = AFC.
C) MC = ATC.
D) MC = P.
3) The monopolist will choose the price and output combination at which
A) MC equals AR.
B) MC equals MR.
C) MC equals price.
D) MR equals AR.
4) The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can
A) only choose the desired output, while a competitive firm can control only price.
B) only choose the desired price, while a competitive firm can control only output.
C) control the position of its demand schedule, but a competitive firm cannot.
D) control the desired price and output to maximize profits, but a perfectly competitive firm can only choose the desired output.
5) The profit-maximizing price and quantity established by the unregulated monopolist in the above figure are
A) Q1 units of output and a price of P5.
B) Q3 units of output and a price of P3.
C) Q1 units of output and a price of P1.
D) Q4 units of output and a price of P4.
6) In the above figure, at the firm’s profit maximizing output, total revenue is rectangle
7) In the above figure, marginal cost and marginal revenue are equal at output
8) In the above figure, the total cost of producing the profit maximizing level of output is shown by rectangle
9) In the above figure, the monopolist’s profit-maximizing output level is
10) In the above figure, the monopolist’s profit-maximizing price is
11) Suppose a monopolist sells 10,000 units of output at $22 per unit. The firm’s total revenue is
12) A monopolist finds the price-output combination that maximizes its profits by
A) equating total revenue and total cost.
B) equating marginal revenue and marginal cost.
C) finding the combination for which the difference between marginal revenue and marginal cost is the greatest.
D) equating price and marginal cost.
13) According to the above figure, the profit maximizing price-output combination for the monopolist is a price of
A) 50 cents and an output of 40,000 newspapers per day.
B) 30 cents and an output of 30,000 newspapers per day.
C) 60 cents and an output of 30,000 newspapers per day.
D) 45 cents and an output of 45,000 newspapers per day.
14) The monopolist is a
A) price taker who tries to find the profit-maximizing rate of output.
B) price taker who tries to find the profit-maximizing price.
C) price searcher who tries to find the profit-maximizing price-output combination.
D) price searcher who tries to find the rate of output that maximizes price.
15) If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits.
B) reduce output if it wants to maximize profits.
C) increase price and keep output unchanged if it wants to maximize profits.
D) increase output if it wants to maximize profits.
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