8. Refer to Exhibit 24-2. The profit-maximizing monopolist produces Q 0 units an
ID: 1100668 • Letter: 8
Question
8. Refer to Exhibit 24-2. The profit-maximizing monopolist produces Q0 units and charges a price of
a.
P0.
b.
P1.
c.
P3.
d.
P2.
e.
none of the above
9. Refer to Exhibit 24-2. Total revenue at the profit-maximizing quantity of output is the
a.
area 0P0AQ0.
b.
area 0P3FQ0.
c.
distance from Q0 to A.
d.
distance from Q0 to D.
e.
none of the above
10. Refer to Exhibit 24-2. This monopolist is earning
a.
an economic loss of area P0P3FA.
b.
an economic loss of area P0P2CA.
c.
an economic profit of area P2P3FC.
d.
an economic profit of area P0P2CA.
11. Refer to Exhibit 24-2. Total cost at the profit-maximizing quantity of output is the
a.
area 0P2CQ0.
b.
area 0P3FQ0.
c.
area 0P1BQ0.
d.
distance from Q0 to D.
e.
none of the above
a.
P0.
b.
P1.
c.
P3.
d.
P2.
e.
none of the above
Explanation / Answer
8. c) P3 (since this is the only point to yield a profit
9) Revenue=Area under curve=OP3FQ0
10)Profit=Revenue-Total cost=OP3FQ0-OP2CQ0=P2P3FC. c) is correct.
11)Found in previous part=Area under the average cost curve=OP2CQ0
a) is correct.
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