3. Monopolist sets price a $12 and sells 250 units. The marginal revenue cost co

Question

3. Monopolist sets price a $12 and sells 250 units. The marginal revenue cost corresponding to this level of output is $6 and $8 respectively. What recommendation would you give this monopolist? A. Lower price 10 B. Raise the price C. Raise the output level D. Keep the same price E- Keep the seme eutpat-level 4. Consumer surplus is equal the area below the and above A. Price; Supply Curve B. Demand Area; Price C.Demand Curve; Supply Curve D. Price; Demand Curve E. Supply Curve; Demand Curve 5. An unregulated negative production externality will cause a private market to A. Produce less than is socially optimal B. Produce more than is socially optimal C. Produce more than market equilibrium D-Preduee E. Produce the amount that is socially optimal librium 6. On the foreign exchange market, an increase in a country's exchange rate A. Decrease the quantity demand of its currency B.-1 C. Has no effect on the quantity demand of its currency D. Decrease the quantity supplied of its currency E. has no effect of the quantity supplied of its currency 7. If you want to know the long-run equilibeium curve, which one below is most helpful? output of one perfectly competitive firm, and you are permitted to see oely one A. Demand B. Marginal Cost C. Average total cost D. Average Fixed cost E. Average Variable cost MacBook Air

Explanation / Answer

Ans)
3
B raise the price
Profit is maximized where MC =Mr.Here MC is greater than MR thus output needs to be reduced and the price must be increased.
4
B. Demand Curve;Price
The consumer surplus is the area under the demand curve and above the price.It is the difference between the willingness to pay and what the consumer actually pays.
5.
B.Produce more than it is socially optimal
For a negative externality the socially optimal quantity is less than that under an unregulated market as social costs are higher.So in an unregulated market the firm will produce more.
6.
A. Decrease the quantity demanded of that currency
If the exchnage rate rises then the value of the currency rises which makes it more expensive.As a rsult the demand for the currency decreases.

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

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