Answer to Question #49387 in Microeconomics for kristin

Question

1.If the uniform price of a monopolist’s good is $50 per unit and its marginal cost is $25, then:

to maximize profit the firm should increase output

to maximize profit the firm should decrease output

to maximize profit the firm should continue to produce the output it is producing

there is not enough information to determine whether output should be changed or remain constant to maximize profit


2. If a profit maximizing monopolist is producing such that marginal cost is $10 and its marginal revenue is $4, it will increase its profits by:

reducing price and increasing output

increasing price and reducing output

reducing both price and output

increasing both price and output

raising price while keeping output unchanged


3.if a monopolist is producing a level of output that maximizes total profit, then it will necessarily be

minimizing total cost

maximizing profit per unit of output

maximizing total revenue

maximizing the difference between total revenue and total cost

Answer 1

1.If the uniform price of a monopolist’s good is $50 per unit and its marginal cost is $25, then:
c) there is not enough information to determine whether output should be changed or remain constant to maximize profit
2. If a profit maximizing monopolist is producing such that marginal cost is $10 and its marginal revenue is $4, it will increase its profits by:
b) increasing price and reducing output
3.if a monopolist is producing a level of output that maximizes total profit, then it will necessarily be
d) maximizing the difference between total revenue and total cost