AP Microeconomics - Chapter 12 Reading Homework - Ethan...

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Ethan Brown Jason Ruffer AP Microeconomics 11/13/2019 3. Incorrect Answer: A Correct Answer: B Reason: Because monopolists set their own prices, supply curves are not displayed on a monopoly graph. 10. Incorrect Answer: D Correct answer: C Reason: If marginal revenue is positive, total revenue is increasing. 19. Incorrect Answer: D Correct Answer: C Reason: The marginal revenue of producing the tenth unit is $1,000 because: 10 x $10000 = $100,000 9 x $11000 = $99,000 $100,000 - $99,000 = $1,000 Marginal Revenue = $1,000 23. Incorrect Answer: A Correct Answer: B Reason: Even though a monopolist is a price maker, if total expenses are greater than total profit,
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Unformatted text preview: the profit will still be negative, which would be referred to as a loss in this case. So a monopolist will make a loss or profit varying on the market for the product. 25. Incorrect Answer: C Correct Answer: A Reason: If a firm is selling and producing at the socially optimal price and output, this means that Price = Marginal Cost, and at this level of price and output the firm will go bankrupt unless it is subsidized. 30. Incorrect Answer: A Incorrect Answer: C Reason: A monopolistic firm will never operate in the inelastic region of the graph because the monopolist can set the price in the elastic region of the graph....
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