77 487
Assignments Done
99,1%
Successfully Done
In July 2019

Question #49285
1) Suppose that at 100 units of output a monopolist is producing such that marginal revenue is equal to marginal cost. The firm is selling its output at a price of \$8 per unit and is incurring average variable costs of \$5 per unit and average fixed costs of \$4 per unit. On the basis of this information we can conclude that the firm is:

operating at maximum profit by producing the 100 units of output

operating at a loss that could be reduced by shutting down

operating at a profit that could be increased by producing more output

operating at a loss that is less than the loss incurred by shutting down

2) Suppose a firm has monopoly power in the production of a particular good. If it finds that revenue and cost conditions are such that at all levels of output the price it can charge in order to sell all of the units is less than the average variable costs then it is in the firms best interest to:

close down because its operating losses will exceed its shut-down losses at all levels of output

maximize profits by producing where MR = MC

close down because its total operating cost will exceed its total revenue

minimize losses by producing where MR = MC
1) Suppose that at 100 units of output a monopolist is producing such that marginal revenue is equal to marginal cost. The firm is selling its output at a price of \$8 per unit and is incurring average variable costs of \$5 per unit and average fixed costs of \$4 per unit. On the basis of this information we can conclude that the firm is:
d) operating at a loss that is less than the loss incurred by shutting down

2) Suppose a firm has monopoly power in the production of a particular good. If it finds that revenue and cost conditions are such that at all levels of output the price it can charge in order to sell all of the units is less than the average variable costs then it is in the firm&rsquo;s best interest to:
a) close down because its operating losses will exceed its shut-down losses at all levels of output

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!