1clip_image002.jpg”> Figure 7.2 31) Figure 7.2 shows a monopolist’s demand curve. The marginal…

1clip_image002.jpg”>

Figure 7.2

31)
Figure 7.2 shows a monopolist’s demand curve. The marginal revenue from selling
the third unit is
A)
\$6.
B)
\$8.
C)
\$10.
D)
\$44.

32)
Figure 7.2 shows a monopolist’s demand curve. The marginal revenue from selling
the fourth unit is
A)
\$8.
B)
\$6.
C)
\$4.
D)
\$2.

33)
Figure 7.2 shows a monopolist’s demand curve. Suppose that the marginal cost is
\$6 for all units and the current output level is 4 units. Then what would you
recommend to the firm?
A)
Lower the pricetosell more units.
B)
Raise the price and sell fewer units.
C)
Maintain the current price and output level.
D)
There is not sufficient information.

34)
Figure 7.2 shows a monopolist’s demand curve. Suppose that the marginal cost is
\$6 for all units and the current output level is 4 units. Then which of the
following is true?
A)
The marginal revenue is less than the marginal cost.
B)
The price is greater than the average total cost.
C)
The firm is producing the profit maximizing level of output.
D)
All of the above.

35)
How do monopoly prices and quantities produced differ from perfectly
competitive outcomes,all
other things equal?
A)
Monopoly prices and quantities are both lower than competitive outcomes.
B)
Monopoly prices and quantities are both higher than competitive outcomes.
C)
Monopoly prices are lower than competitive prices but monopoly quantities are
higher than competitive quantities.
D)
Monopoly prices are higher than competitive prices but monopoly quantities are
lower than competitive quantities.

36)
A monopolist maximizes profits by setting the quantity where
A)
marginal revenue equal to marginal cost.
B)
marginal revenue greater than marginal cost.
C)
marginal revenue less than marginal cost.
D)
total revenue as high as possible.

37)
If a monopolist is maximizing its profits, we know that it has
A)
maximized total revenue.
B)
maximized marginal revenue.
C)
minimized total cost.
D)
equated marginal cost and marginal revenue.

38)
At a price of \$10, the marginal revenue of a monopolist is \$6. If the marginal
cost of production is \$8, what should the monopolist do in order to maximize
profits?
A)
Increase its price.
B)
Decrease its price.
C)
Keep its price at the same level.
D)
not enough information to solve

39)
At a price of \$20, the marginal revenue of a monopolist is \$12. If the marginal
cost of production is \$10, what should the monopolist do in order to maximize
profits?
A)
Increase its price.
B)
Decrease its price.
C)
Keep its price at the same level.
D)
not enough information to solve

1clip_image004.jpg”>

Figure 7.3

40)
The firm in Figure 7.3 will produce
A)
Q1.
B)
Q2.
C)
Q3.
D)
Q4.

41)
The firm in Figure 7.3 will charge
A)
P1.
B)
P2.
C)
P3.
D)
P4.