Homework Answers
2.
The single monopoly profit-maximizing condition is
MR=MC
Or MR should be slightly greater than MC
Since there is a single seller in the monopoly, so monopoly firm has market power, therefore the demand curve of the monopoly is inelastic demand.
Hence option a is the correct answer.
3.
Since there is a single seller in the monopoly, so monopoly firm has market power, therefore the demand curve of the monopoly is inelastic demand. Since for selling an extra unit of output firm need to lower price. Hence MR curve lies below demand curve.
Since marginal revenue is the additional revenue by selling an additional unit of output.
Marginal revenue is change in the total revenue due to an additional units is sold.
MR= TRn-TRn-1
So the monopoly arise when there is barriers to entry. So that no new firm can enter in the market.
Hence option c is the correct answer.
4.
Since there is a single seller in the monopoly, so monopoly firm has market power, therefore the demand curve of the monopoly is inelastic demand. Since for selling an extra unit of output firm need to lower price. Hence MR curve lies below demand curve.
Since marginal revenue is the additional revenue by selling an additional unit of output.
Marginal revenue is change in the total revenue due to an additional units is sold.
MR= TRn-TRn-1
So the monopoly arise when there is barriers to entry. So that no new firm can enter in the market.
Hence option c is the corrrect answer.
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