Question

Califormia State University Long Beach est Form B Table 2: A monopoly's costs Price (5) 35 30 25 20 | Quantity | Total cost (S) 10 12 16 Te 30 11. Refer to Table 2. What is the firm's total revenue if it sells two units? A) $60 B) $48 C) 530 D) S25 12. Refer to Table 2. What is the firm's marginal revenue if it sells two units? A) $60 B) $48 C) S30 D) $25 13. Refer to Table 2. What is the firm's marginal cost if it sells two units? A) S12 B) S2 C) S6 D) $20 Refer to Table 2. What price should the firm charge in order to maximize its profit? A) S25 B) $20 C) s15 D) $30 14. 15. Economies of scale is the situation where A) a firm's marginal cost decreases as it produces more output B) a firm's marginal revenue decreases as it produces more output C) a firm's average total cost decreases as it produces more output. D) a firm's profit increases as it produces more output. Which of the following is true of both monopolistic competition and monopoly? A) Firms carn zero economic profit in the long run B) Firms' demand curves are downward-sloping C) Both types of market structures are productively efficient in the long run D) Marginal revenue is equal to the price 16.

Answer 1

Solution-

11. The correct option is A. $60

Reason-

Total Revenue = output x price = 2 x 30 = $60

12. The correct option is D. $25

Reason-

MR = change in TR / change in quantity

= (35 - 60) / (1 - 2)

= -25 / -1

= 25

13. The correct option is B. $2

Reson-

MC = change in TC / change in Quantity

= (10 - 12) / (1 - 2)

= -2 / -1

= 2

14. The correct option is A. $25

Reason-

Profit at price $25 is higher than other prices, hence profit maximizing price is $25.

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