Question #49284

1) Like a perfectly competitive firm, if a monopolist wants to know how much it will save by reducing output, it will evaluate its:
marginal product function
average product function
marginal cost function
average variable cost function
average total cost function
2) Suppose that a monopolist finds itself to be operating at a break-even point. It follows that its:
i. total revenue is equal to total variable cost
ii. total revenue is equal to total cost
iii. average revenue is equal to average variable cost
iv. average revenue is equal to average total cost
i
ii
iii
i and iii
ii and iv
3) A profit-maximizing monopolist that sells all units of its output for a single (uniform) price will set this price:
as far above average total cost (ATC) as possible
along the elastic portion of its demand curve
along the inelastic portion of its demand curve
at the minimum of it average total cost (ATC) curve
where the marginal cost (MC) curve intersects the demand curve

Expert's answer

1) Like a perfectly competitive firm, if a monopolist wants to know how much it will save by reducing output, it will evaluate its:

c) marginal cost function

2) Suppose that a monopolist finds itself to be operating at a break-even point. It follows that its:

i. total revenue is equal to total variable cost

ii. total revenue is equal to total cost

iii. average revenue is equal to average variable cost

iv) average revenue is equal to average total cost

e) ii and iv

3) A profit-maximizing monopolist that sells all units of its output for a single (uniform) price will set this price:

a) as far above average total cost (ATC) as possible

c) marginal cost function

2) Suppose that a monopolist finds itself to be operating at a break-even point. It follows that its:

i. total revenue is equal to total variable cost

ii. total revenue is equal to total cost

iii. average revenue is equal to average variable cost

iv) average revenue is equal to average total cost

e) ii and iv

3) A profit-maximizing monopolist that sells all units of its output for a single (uniform) price will set this price:

a) as far above average total cost (ATC) as possible

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