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A monopolist faces the demand curve illustrated below. Draw the marginal revenue (MR) curve on the graph. Suppose the marginal cost (MC) and average variable cost (AVC) both equal 6 for all quantity levels, MC = AVC = 6. Draw the MC curve in the graph. $12 11 10 9 8 7 6 5 4 3 2 R -1 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 15. Marginal revenue equals zero at what quantity level? a) Q = 0 b) Q = 6 c) Q = 9 d) Q = 12 e) Q = 18 16. At the quantity where Marginal Revenue equals zero a) Revenue is maximized b) The elasticity of demand is greater than one c) The elasticity of demand is less than one d) Marginal revenue equals average revenue 17. Assume the fixed cost equals zero. The profit maximizing monopoly price equals a) 6 b) 8 c) 9 d) 10 e) 11 18. Again, assuming the fixed cost equals zero, the monopoly profit equals equals a) 10 b) 12 c) 14 d) 16 e) 18

A monopolist faces the demand curve illustrated below. Draw the marginal revenue (MR) curve on the graph. Suppose the marginal cost (MC) and average variable cost (AVC) both equal 6 for all quantity levels, MC = AVC = 6. Draw the MC curve in the graph. $12 11 10 9 8 7 6 5 4 3 2 R -1 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 15. Marginal revenue equals zero at what quantity level? a) Q = 0 b) Q = 6 c) Q = 9 d) Q = 12 e) Q = 18 16. At the quantity where Marginal Revenue equals zero a) Revenue is maximized b) The elasticity of demand is greater than one c) The elasticity of demand is less than one d) Marginal revenue equals average revenue 17. Assume the fixed cost equals zero. The profit maximizing monopoly price equals a) 6 b) 8 c) 9 d) 10 e) 11 18. Again, assuming the fixed cost equals zero, the monopoly profit equals equals a) 10 b) 12 c) 14 d) 16 e) 18

Survey Of Economics
Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
Problem 6SQP
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A monopolist faces the demand curve illustrated below. Draw the marginal revenue (MR) curve on the graph. Suppose the marginal cost (MC) and average variable cost (AVC) both equal 6 for all quantity levels, MC = AVC = 6. Draw the MC curve in the graph. 512 11 10 10987 7 6 5 4 3 2 1 0 -1 -2 -3 15. Marginal revenue equals zero at what quantity level? a) Q = 0 b) Q = 6 c) Q = 9 d) Q = 12 e) Q = 18 U 16. At the quantity where Marginal Revenue equals zero a) Revenue is maximized b) The elasticity of demand is greater than one c) The elasticity of demand is less than one d) Marginal revenue equals average revenue b) 8 c) 9 d) 10 e) 11 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 17. Assume the fixed cost equals zero. The profit maximizing monopoly price equals a) 6 b) 12 c) 14 18. Again, assuming the fixed cost equals zero, the monopoly profit equals equals a) 10 d) 16 e) 18
Transcribed Image Text:A monopolist faces the demand curve illustrated below. Draw the marginal revenue (MR) curve on the graph. Suppose the marginal cost (MC) and average variable cost (AVC) both equal 6 for all quantity levels, MC = AVC = 6. Draw the MC curve in the graph. 512 11 10 10987 7 6 5 4 3 2 1 0 -1 -2 -3 15. Marginal revenue equals zero at what quantity level? a) Q = 0 b) Q = 6 c) Q = 9 d) Q = 12 e) Q = 18 U 16. At the quantity where Marginal Revenue equals zero a) Revenue is maximized b) The elasticity of demand is greater than one c) The elasticity of demand is less than one d) Marginal revenue equals average revenue b) 8 c) 9 d) 10 e) 11 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 17. Assume the fixed cost equals zero. The profit maximizing monopoly price equals a) 6 b) 12 c) 14 18. Again, assuming the fixed cost equals zero, the monopoly profit equals equals a) 10 d) 16 e) 18
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