Answer to Question #49284 in Microeconomics for Bradly

Question

1) Like a perfectly competitive firm, if a monopolist wants to know how much it will save by reducing output, it will evaluate its:



marginal product function


average product function


marginal cost function


average variable cost function


average total cost function

2) Suppose that a monopolist finds itself to be operating at a break-even point. It follows that its:
i. total revenue is equal to total variable cost
ii. total revenue is equal to total cost
iii. average revenue is equal to average variable cost
iv. average revenue is equal to average total cost



i


ii


iii


i and iii


ii and iv

3) A profit-maximizing monopolist that sells all units of its output for a single (uniform) price will set this price:



as far above average total cost (ATC) as possible


along the elastic portion of its demand curve


along the inelastic portion of its demand curve


at the minimum of it average total cost (ATC) curve


where the marginal cost (MC) curve intersects the demand curve

Answer 1

1) Like a perfectly competitive firm, if a monopolist wants to know how much it will save by reducing output, it will evaluate its:
c) marginal cost function

2) Suppose that a monopolist finds itself to be operating at a break-even point. It follows that its:
i. total revenue is equal to total variable cost
ii. total revenue is equal to total cost
iii. average revenue is equal to average variable cost
iv) average revenue is equal to average total cost
e) ii and iv

3) A profit-maximizing monopolist that sells all units of its output for a single (uniform) price will set this price:
a) as far above average total cost (ATC) as possible