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Breakup Room Excercise 10

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20 views

Breakup Room Excercise 10

Uploaded by

Lê Nguyễn Tuấn Kiệt
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1) The figure below shows the demand schedule and demand curve for a product produced by a

single-price monopolist.

FIGURE 10-1

Refer to Figure 10-1. Suppose this single-price monopolist is initially selling 9 units at $4 each
and then reduces the price of the product to $3. By making this change, the revenue the firm
gives up on the units it was already selling is ________ and the revenue it gains on the additional
units sold is ________. Its marginal revenue is therefore ________. (All figures are dollars)
A) 40; 27; -13
B) 30; 36; 6
C) 34; 28; -6
D) 9; 3; -6
E) 3; 9; 6

Refer to Figure 10-1. What is the level of output at which marginal revenue first becomes
negative?
A) 5th unit
B) 6th unit
C) 7th unit
D) 8th unit
E) 9th unit
2) The figure shows demand and marginal revenue for a single price monopoly.

FIGURE 10-5

Refer to Figure 10-5. For this single-price monopoly, demand is elastic at any price above
A) $2.
B) $4.
C) $6.
D) $8.
E) $10.

Refer to Figure 10-5. Assume production costs are constant and equal to $6.00 (i.e., AC = MC =
$6.00).
For this single-price monopoly, the profit-maximizing (or loss minimizing) level of output is
A) 250 units.
B) 500 units.
C) 750 units.
D) 1000 units.
E) more than 1000 units.

Refer to Figure 10-5. Assume production costs are constant and equal to $6.00 (i.e., AC = MC =
$6.00).
For this single-price monopoly, at the profit-maximizing (or loss minimizing) level of output,
price per unit is
A) $6.
B) $7.
C) $8.
D) $9.
E) $10.

Refer to Figure 10-5. Assume production costs are constant and equal to $6.00 (i.e., AC = MC =
$6.00).
For this single-price monopoly, at the profit-maximizing (or loss minimizing) level of output,
Total Revenue is
A) $750.
B) $1500.
C) $2500.
D) $3000.
E) $4500.

3) Suppose a monopolist faces the demand curve and cost curves shown below.

FIGURE 10-6

Refer to Figure 10-6. A profit-maximizing single-price monopolist would charge the price
A) P0.
B) P1.
C) P2.
D) P3.
E) P4.

Refer to Figure 10-6. The average per unit profit earned by this profit-maximizing single-price
monopolist is
A) P4 - P0.
B) P4 - P1.
C) P4 - P2.
D) P4 - P3.
E) P3 - P2.

Refer to Figure 10-6. If the single-price monopolist is producing at the profit-maximizing level
of output, its total cost is represented by the area
A) 0P4aQ0.
B) 0P3cQ3.
C) 0P1dQ1.
D) 0P2bQ0.
E) 0P0gQ5.

4) Your food-services company has been named as the monopoly provider of meals at a small
university. The cost and demand schedules are:

Price per Total


Meal Total Cost Revenue
Sold per Day $ $ $
0 6.00 500 0
100 5.50 550 550
200 5.00 600 1000
300 4.50 675 1350
400 4.00 800 1600
500 3.50 950 1750
600 3.00 1200 1800
700 2.50 1600 1750

TABLE 10-2

Refer to Table 10-2. Assuming this firm is a single-price monopolist, which of the following best
approximates the firm's profit-maximizing output and price?
A) 150 meals at $5.50 per meal
B) 250 meals at $0.75 per meal
C) 350 meals at $2.50 per meal
D) 450 meals at $3.75 per meal
E) 550 meals at $3.25 per meal

Refer to Table 10-2. Assume this firm is a single-price monopolist. At the profit-maximizing
level of output, the elasticity of demand is
A) less than one.
B) one.
C) greater than one.
D) infinite.
E) impossible to know with the available information.

Refer to Table 10-2. Assume this firm is a single-price monopolist. If this firm provided 400
meals per day, its profits per day would be ________; if the firm provided 700 meals per day its
profits would be ________.
A) $1600; $1750
B) $400; $150
C) $400; -$400
D) $1750; $1600
E) $800; $150

Refer to Table 10-2. For this monopolist, at what level of output is its marginal revenue equal to
its marginal cost?
A) between 200 and 300
B) between 300 and 400
C) between 400 and 500
D) between 600 and 700
E) at no level of output.

Refer to Table 10-2. If this firm is providing 500 meals per day, what is its profit per meal
served?
A) -$0.50
B) $1.60
C) $1.90
D) $2.00
E) $3.50

5) Suppose a single-price monopolist knows the following information:

Fixed
Price Quantity TR MR Cost TC ATC MC
$9.00 1500 $4.00 $7000 $7.00 $5.00

The total profit being earned by this firm at the current level of output is
A) $1500.
B) $3000.
C) $6500.
D) $10 500.
E) $13 500.
6) Suppose a single-price monopolist knows the following information:

Fixed
Price Quantity TR MR Cost TC ATC MC
$5.00 2000 $4.00 $2000 $5.00 $3.00

The monopolist could maximize profits in the short run by


A) staying at the current price and output.
B) lowering price and increasing output.
C) lowering price and leaving output unchanged.
D) raising price and lowering output.
E) shutting down.

7) Suppose a single-price monopolist knows the following information:

Fixed
Price Quantity TR MR Cost TC ATC MC
5.00 2000 $4.00 $2000 $5.00 $3.00

The total profit being earned by this firm at the current level of output is
A) -$2000.
B) -$1000.
C) 0.
D) $1000.
E) $2000.

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