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The monopolist's total cost is
A) $1,116.
B) $1,240.
C) $1,660.
D) $1,726.40.
12) Refer to Figure 15-3. The monopolist earns a profit of
A) $0.
B) $170.
C) $248.
D) $372.
Table 15-2
|
Price |
Quantity |
Total Revenue |
Marginal Revenue |
Total Cost |
Marginal Cost |
|
$17 |
3 |
$51 |
----- |
$56 |
----- |
|
16 |
4 |
64 |
$13 |
63 |
$7 |
|
15 |
5 |
75 |
11 |
71 |
8 |
|
14 |
6 |
84 |
9 |
80 |
9 |
|
13 |
7 |
91 |
7 |
90 |
10 |
|
12 |
8 |
96 |
5 |
101 |
11 |
Assume Table 15-2 gives the monthly demand and costs for subscriptions to basic cable for Comcast, a cable television monopoly in Philadelphia.
13) Refer to Table 15-2. If Comcast wants to maximize its profits, what price (P) should it charge and how many cable subscriptions per month (Q) should it sell?
A) P = $12; Q = 8
B) P = $14; Q = 6
C) P = $16; Q = 4
D) P = $15: Q = 5
14) Refer to Table 15-2. If Comcast maximizes its profits how much profit will it earn?
A) $84
B) $40
C) $4
D) Comcast will break even.
15) To maximize profit a monopolist will produce where
A) marginal revenue is equal to marginal cost.
B) demand for its product is unit-elastic.
C) revenue per unit is maximized.
D) average total cost is equal to average revenue.
16) If a monopolist's marginal revenue is $35 per unit and its marginal cost is $25, then
A) to maximize profit the firm should increase output.
B) to maximize profit the firm should decrease output.
C) to maximize profit the firm should continue to produce the output it is producing.
D) Not enough information is given to say what the firm should do to maximize profit.
17) If a monopolist's price is $50 at 63 units of output and marginal revenue equals marginal cost and average total cost equals $43, then the firm's total profit is
A) $3,150.
B) $2,709.
C) $441.
D) $7.
18) Which of the following statements is true?
A) Monopolists are price makers. All other firms are price takers.
B) Unlike other industries, monopoly industries have high barriers to entry.
C) Only monopoly firms are granted patents and copyrights.
D) Unlike other firms, a monopolist's demand curve is the same as the market demand curve.
19) The demand curve for a monopoly firm
A) is perfectly inelastic.
B) lies below its marginal revenue curve.
C) is the same as the market demand curve.
D) is horizontal.
20) A monopolist will maximize profit where marginal revenue equals marginal cost.
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