Homework Answers
The correct answer is 'Option B'.
The average revenue of a monopolist falls continuously as more output is produced. This is because the monopolist faces a downward sloping demand curve. The monopolist must lower the price of the product to sell more units as a result of which the marginal revenue decreases and will be less than the price. The average revenue is calculated by dividing the total revenue by quantity. So, the average revenue will decrease as more output is produced because the marginal revenue is decreasing. Therefore, the correct answer is 'Option B'.
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QUESTION 40 When a monopolist increases the amount of output that it produces and sells, its...
Scenario 14-4 The information below applies to a competitive firm that sells its output for 540...
Scenario 14-4 The information below applies to a competitive firm that sells its output for 540 per unit. • When the firm produces and sells 150 units of output, its average total cost is $24.50. . When the firm produces and sells 151 units of output, its average total cost is $24.55. Refer to Scenario 14-4. How does the firm's marginal revenue (MR) compare to its marginal cost (MC) when it increases its output from 150 units to 151 units?...
ID: A 9. When a monopolist is able to sell its product at different prices, it...
ID: A 9. When a monopolist is able to sell its product at different prices, it is engaging in a quality adjusted pricing. b. price differentiation. c. price discrimination. d. distribution pricing. 10. A natural monopoly occurs when a. the product is sold in its natural state (such as water or diamonds). b. there are economies of scale over the relevant range of output. c. the firm is characterized by a rising marginal cost curve. d. production requires the use...
a. A monopolist finds that at its current level of output the marginal cost of production...
a. A monopolist finds that at its current level of output the marginal cost of production is $9, the average total cost is $9.95,the average variable cost is $9.75 and its marginal revenue is $9.45. What would you recommend that the monopolist do to increase profits? One word answer is not enough. Explain. b. A monopolist determines that at the current level of output the marginal revenue is $9.00 and its marginal cost is $10. What should the monopolist do to...
12. Firm Z is a monopolist that sells its output at price $40/unit. If Firm Z's...
12. Firm Z is a monopolist that sells its output at price $40/unit. If Firm Z's marginal cost of production is $32/unit, use the mark-up formula to find the elasticity of demand being faced by Firm Z. (Don't forget to include a minus sign in your answer!)
Question 1 (Mandatory) (5 points) Saved If at an output of 10 units a monopolist is...
Question 1 (Mandatory) (5 points) Saved If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist A) is in equilibrium. B) should increase output. C) should reduce output. D) should raise the price at the current output level. Question 40 (Mandatory) (5 points) The marginal revenue product of a resource measures OA) the additional cost to a firm of employing one more unit of...
Question 10 (Mandatory) (1 point) The single-price monopolist produces the quantity of output at which marginal...
Question 10 (Mandatory) (1 point) The single-price monopolist produces the quantity of output at which marginal cost equals marginal revenue and charges a price that is greater than marginal revenue. True False
above figure, when the firm produces output corresponding to point c the firm's marginal co A)...
above figure, when the firm produces output corresponding to point c the firm's marginal co A) equals its marginal revenue B) exceeds its marginal revenue C) equals its average revenue. D) is less than its marginal revenue. E) more information would be needed to answer the question 25) At a firm's break-even point, its A) marginal revenue exceeds its marginal cost. 13) marginal revenue equals its average variable cost. C) total revenue equals its total opportunity cost. D) also its...
When price is equal to 7, a monopolist can sell 30 units of output, and when...
When price is equal to 7, a monopolist can sell 30 units of output, and when price is equal to 6, a monopolist can sell 40 units of output. What is the firm's marginal revenue?
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only...
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only produce an output where the demand is perfectly elastic, B) A monopolist will only produce an output where the demand is elastic C) A monopolist will only produce an output where the demand is inelastic. D) A monopolist will only produce an output where the demand is unitary elastic. 2) When is a monopolist's total revenue at a maximum? A) When its marginal revenue...
13. As output (plant size) increases, economies of scale occur when the A) long-run average cost...
13. As output (plant size) increases, economies of scale occur when the A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant 14. Economies of scale can occur as a result of which of the following? A) increasing marginal costs as the firm increases its size B) higher fixed cost as the firm increases its size C) management difficulties as the firm increases its size D) greater specialization...
Scenario 14-4 The information below applies to a competitive firm that sells its output for 540 per unit. • When the firm produces and sells 150 units of output, its average total cost is $24.50. . When the firm produces and sells 151 units of output, its average total cost is $24.55. Refer to Scenario 14-4. How does the firm's marginal revenue (MR) compare to its marginal cost (MC) when it increases its output from 150 units to 151 units?...
ID: A 9. When a monopolist is able to sell its product at different prices, it is engaging in a quality adjusted pricing. b. price differentiation. c. price discrimination. d. distribution pricing. 10. A natural monopoly occurs when a. the product is sold in its natural state (such as water or diamonds). b. there are economies of scale over the relevant range of output. c. the firm is characterized by a rising marginal cost curve. d. production requires the use...
12. Firm Z is a monopolist that sells its output at price $40/unit. If Firm Z's marginal cost of production is $32/unit, use the mark-up formula to find the elasticity of demand being faced by Firm Z. (Don't forget to include a minus sign in your answer!)
Question 1 (Mandatory) (5 points) Saved If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist A) is in equilibrium. B) should increase output. C) should reduce output. D) should raise the price at the current output level. Question 40 (Mandatory) (5 points) The marginal revenue product of a resource measures OA) the additional cost to a firm of employing one more unit of...
Question 10 (Mandatory) (1 point) The single-price monopolist produces the quantity of output at which marginal cost equals marginal revenue and charges a price that is greater than marginal revenue. True False
above figure, when the firm produces output corresponding to point c the firm's marginal co A) equals its marginal revenue B) exceeds its marginal revenue C) equals its average revenue. D) is less than its marginal revenue. E) more information would be needed to answer the question 25) At a firm's break-even point, its A) marginal revenue exceeds its marginal cost. 13) marginal revenue equals its average variable cost. C) total revenue equals its total opportunity cost. D) also its...
1) Which of the following statements regarding a monopolist is correct? A) A monopolist will only produce an output where the demand is perfectly elastic, B) A monopolist will only produce an output where the demand is elastic C) A monopolist will only produce an output where the demand is inelastic. D) A monopolist will only produce an output where the demand is unitary elastic. 2) When is a monopolist's total revenue at a maximum? A) When its marginal revenue...
13. As output (plant size) increases, economies of scale occur when the A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant 14. Economies of scale can occur as a result of which of the following? A) increasing marginal costs as the firm increases its size B) higher fixed cost as the firm increases its size C) management difficulties as the firm increases its size D) greater specialization...
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