E) profitable 38) A profit-maximizing monopolistic firm will adjust its output t
ID: 1122840 • Letter: E
Question
E) profitable 38) A profit-maximizing monopolistic firm will adjust its output to the point whe A) average revenue marginal revenue B) average total costs are minimized C) marginal revenue marginal costs D) average revenue average cost E) marginal costs = average revenue 39) Airlines are an example of A) oligopoly B) perfect competition C) duopoly D monopol E) monopolistic competition aD Fase fod esusanc mane u 40) A) monopoly B) perfect competition C) natural monopoly D) monopolistic competition E) none of the aboveExplanation / Answer
38) C is correct
Marginal revenue is the additional revenue firms get by selling one more unit of the output. Marginal cost is the additional cost of producing one more unit of output. Profit is maximised when marginal revenue and marginal cost are equal because at this point all the profit opportunities are exhausted. Increasing or decreasing output will lower profit
39) A is correct
Airlines are an example of oligopoly because this market is dominated by small group of airlines only.
40) D is correct
Fast food restaurants are an example of monopolistic competition. There are many fast food restaurants and each sell same food with difference in taste. For example Macdonalds and burger king, both sell burgers but at different prices.
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