6. Consider a market like the one illustrated in the figure below. If a monopoly

Question

6. Consider a market like the one illustrated in the figure below. If a monopoly in this market tried to set its price above the minimum point on its average cost curve, what would happen to the number of units it sells?
The number of units sold would rise. The number of units sold would fall. The number of units sold would remain unchanged. The firm would sell zero units. Competition Monopoly Consumers get this Consumers get this The monopolist gets this Consumer surplus No one gets this (deadweight loss) Pr DWL Supply P MC-AC Demand Demand ac-Optimal quantity Oc Optimal a quantity Qm Marginal revenue

Explanation / Answer

6) The correct option is b) , the number of units sold will fall because the demand function is downward sloping and to increase price the monopolist need to decrease quantity.

7) Answer is option C ,because while making production decision the firm compares the revenue from and the cost of producing additional unit of output.

8) The correct option is c, because in equilibrium in monopoly is characterized by MR=MC condition.

9) the correct option is c because as price decreases revenue from each additional unit decrease thus output will increase but due increase in the output at teach price level total rvenue will increase.

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.