Answer to Question #183417 in Microeconomics for James

Question

QUESTION 23

If the marginal revenue exceeds the marginal cost, then:

1. The firm should produce the extra unit.
2. The firm should reduce its level of output.
3. The firm should shut down completely.
4. The firm should contact its competitors.
5. The firm should apply for tax exemptions.

QUESTION 24

For a monopolist, marginal revenue:

1. Is constant.
2. Is continuously increasing.
3. Is higher than the price.
4. Is not equal to the price.
5. I give up! 

QUESTION 25

The monopolist will charge:

1. Less than the socially optimal price.
2. Exactly the socially optimal price.
3. Less than firms in perfect competition would.
4. What consumers are willing to pay.
5. Every single individual their own unique price.

QUESTION 26

As a monopolist’s output increases, marginal revenue:

1. Eventually becomes positive.
2. Increases
3. Increases proportionately.
4. Increases disproportionately.
5. Decreases.

Answer 1

QUESTION 23

1. If the marginal revenue exceeds the marginal cost, then the firm should produce the extra unit.

QUESTION 24

1. For a monopolist, marginal revenue is not equal to the price.

QUESTION 25

1. The monopolist will charge what consumers are willing to pay.

QUESTION 26

As a monopolist’s output increases, marginal revenue decreases.