Total revenue for producing 8 units of output is $48

Question # 00542820 Posted By: dr.tony Updated on: 06/09/2017 01:29 AM Due on: 06/09/2017
Subject Economics Topic Microeconomics Tutorials:
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Name ___________________________________ Principles of Microeconomics

1. Total revenue for producing 8 units of output is $48. Total revenue for producing 9 units of output is $63. Given this information, the:

A. Average revenue for producing 9 units is $1

B. Average revenue for producing 9 units is $15

C. Marginal revenue for producing the ninth unit is $1

D. Marginal revenue for producing the ninth unit is $15

2. In pure monopoly, marginal revenue is:

A. Equal to total revenue B. Equal to product price

C. Less than product price D. Greater than product price

3. A pure monopolist's demand curve is:

A. downward sloping. B. upsloping.

C. parallel to the vertical axis. D. parallel to the horizontal axis.

4. Under pure monopoly, a profit-maximizing firm will produce:

A. In the inelastic range of its demand curve B. In the elastic range of its demand curve

C. Only where total costs are zero D. Only where marginal revenue is zero

5. One defining characteristic of pure monopoly is

A. The monopolist is a price taker B. The monopolist uses advertising

C. The monopolist produces a product with no close substitutes

D. There is relatively easy entry into the industry, but exit is difficult

6. The entry of generic drugs into a previously monopolized pharmaceutical market will:

A. discourage the development of new drugs.

B. increase efficiency by increasing consumer surplus.

C. create inefficiency by introducing chemically-inferior medications.

D. not affect the market price because pharmaceutical firms are "price takers."

7. When patents on new medications expire, the market for those drugs:

A. change from being monopolyto being competitive.

B. change from being competitive to being monopolistic.

C. collapse. D. encourage firms to leave the market.

8. A monopolistic firm has a sales schedule such that it can sell 14goods per week at $11 each, but if it produces15 per week it can sell these only at $10 each. The marginal revenue of the 15th unit of sales per week is: _______________________

Is it possible for this monopolist to produce 15th unit? ______________________

Reason:

9. A monopolistic firm has a sales schedule such that it can sell 20 goods per week at $50 each, but if it restricts its output to 19 per week it can sell these at $52 each. The marginal revenue of the 20 unit of sales per week is: _______________________

Is it possible for this monopolist to produce 20th unit? ______________________

Reason:

10. In the table below are cost and demand data for a pure monopolist. Use blank columns as needed.

Quantity demanded Price total cost

0 $105 100

1 96 $144

2 87 180

3 78 210

4 69 252

5 60 300

6 51 351

7 42 405

8 33 460

9 24 516

(a) What is the price that monopolist should charge?

(b) What is the level of output that monopolist should produce?

(c) How much total profits a monopolist can make?

11. Based on the above graph, a monopolist will produce a quantity equal to ____________________

12. Based on the above graph, a monopolist will charge a price equal to ________________________

13. Based on the above graph, TR is maximized at the price equal to ______________________

14. Answer the following on the basis of the following information for a pure monopolist.

a) How many units would the above profit-maximizing monopolist produce?

b) What is the price that monopolist should charge?

c) At its profit-maximizing output, how much total profits a monopolist can make?

?

15. Answer the following questions based on the below graph.

(a) What output will the monopolist produce? ____________________

(b) What price will the monopolist charge? ___________________

(c) What total profit will the monopolist receive at the profit-maximizing level of output? _______________

(d) If this producer has lost his market power and it were in the pure competition what would be the output? __________________ and what would be the price? ____________________

(e) Calculate the efficiency loss or dead weight loss of monopoly (approximate value)?

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