Question

3. (Figure 9.4) Which of the following statements is (are) TRUE? Price (S) 20 18 14 MC 10 MR 24 56 8 0 Quantity (160s) 3.54 I. If the firm is producing 5 units of output, it should expand output to increase profits because P II. At a price of $16, the firm's profits would rise if it raised its price III. The profit-maximizing quantity is 600 units. IV. The profit-maximizing price is $13. MC O II O I and III 4. The inverse demand curve for a monopolist changes from P = 100-2Q to ρ = 120-2Q, while the marginal cost of production remains unchanged at a constant S20. After the change in the demand curve, the profit-maximizing price rises from O $10 to $20; 100 units to 120 units O $50 to $60; 10 units to 12 units O $60 to $70; 20 units to 25 units O $40 to $60; 20 units to 30 units , and the profit-maximizing output rises from .

Answer 1