Answer to Question #201880 in Microeconomics for TINA

Question

9.A monopoly damages consumer welfare by[1] producing few quantities of the good.[2] charging a price equal to the marginal cost.[3] increasing the need to acquire credit for maintaining the standard of living.[4] isolating other producers with similar products.10.Which of the following statement(s) is/are correct about a monopolistic firm?[1] The demand for goods is the same as average cost.[2]The firm may be characterised by a price discriminating strategy.[3] The products produced in the market are similar.[4] The firm exists in a perfect information industry.Scenario 1 for questions 11 and 12A monopolist faces the following demand curve, marginal revenue curve and total cost curve for its product:Q = 400 -2PMR = 200 -QTC = 10Q11.Refer to scenario 1. What is the profit-maximising level of output?[1] 0[2] 10[3] 190[4] 200[5] 400

Answer 1

9:

The correct option is :[1] producing few quantities of the good

This is because when the output is lower and price higher than the equilibrium it leads to dead weight of the consumer welfare.

10: The correct option is 2:.[2]The firm may be characterized by a price discriminating strategy.

This is because price discrimination occurs in all markets except perfect competition.

11:The correct option is 3:[3] 190

Marginal cost(MC)$=\frac{∆TC}{∆Q}$

$MC=10$

$MR=MC\\200-Q=10\\Q=190$