202--S08 More Practice Exam 2 Questions

202--S08 More Practice Exam 2 Questions - Economics 202...

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Economics 202 More Practice Exam 2 Questions 1. A monopoly is currently producing an output level where price is $30, MR = $20, AVC = $16, AC = $24, and MC = $22. In order to maximize profit, this monopoly should A. decrease output. B. increase output C. shut down. D. This monopoly is producing the profit maximizing output level. E. None of the above. 2. Suppose that for a particular PC firm, SRTC = 100 + 20Q + Q 2 , SRMC = 20 + 2Q, and the market price is equal to $30. At what level of output should the firm operate to maximize profit? A. 0 B. 5 C. 10 D. 15 E. None of the above. 3. In our welfare analysis of the takeover of a PC industry by a monopoly, the deadweight loss results from A. the monopoly producing at a quantity such that P > MC. B. the monopoly producing at an output level such that consumers value additional units more than it costs society to produce them. C. the fact that the monopoly takes part of the consumer surplus as profit. D. A and B. E. A and C. F.
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202--S08 More Practice Exam 2 Questions - Economics 202...

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