VIII. The supply curve for a monopolist A) its entire MC curve. B) its MC curve

Question

VIII. The supply curve for a monopolist A) its entire MC curve. B) its MC curve above the minimum point of the Average Variable Cost curve. C) its MC curve above the minimum point of the Average Cost curve. D) its MR curve. E) does not exist. IX. Suppose the U.S. government imposes a tariff on sugar imports. Which of the following is true A) It will reduce the consumer surplus. B) It will increase the producer surplus C) It will increase the government revenue. D) It will reduce the welfare. E) All of the above

Explanation / Answer

1> B

Reason

Below the point where average variable cost, the firm will not supply at all, thus those points are ignored.

2> E

Reason

It will increase the government revenue for the sake of total surplus. The producer surplus will rise though.

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