Question:

The profit maximizing output level for a monopolist is

A.

the output level where price elasticity of demand is −1 and total revenue is maximized

B.

the output level where price elasticity of demand is +1 and total revenue is maximized

C.

the output level where marginal revenue equals marginal cost

D.

where the difference between price and average total cost is the largest

Answer» c. the output level where marginal revenue equals marginal cost

Question:

The minimum point of ATC is at ……………….position of the minimum point of AVC

A.

right

B.

left

C.

same

D.

all of above can be

Answer» b. left

Question:

The supply curve for the monopolist

A.

does not exist

B.

is represented by the marginal cost curve above the average total cost curve

C.

is represented by the marginal cost curve above the average variable cost curve

D.

is represented by the marginal cost curve above the average cost curve

Answer» a. does not exist

Question:

Whenever marginal product is increasing with increasing use of an input,

A.

Total product is increasing at a decreasing rate

B.

Total product is increasing at an increasing rate

C.

Marginal product is less than average product

D.

Average product is decreasing.

Answer» b. Total product is increasing at an increasing rate