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Unformatted text preview: th unit for $6. d. The monopolist now produces 1,000 units and sells the 1,000 th unit for $4. 3. If the (non-price-discriminating) monopolist in the graph above produces 20 units of output, which of the following would be true? a. profit is maximized b. the market price will be less than $25 c. demand is elastic d. marginal revenue is negative 4. If a monopoly is currently producing 25 units of output where the price is $10 and the marginal cost is $10, what should the monopoly do to maximize profit? a. raise the price b. lower the price c. increase production d. shut down 5. If a natural monopoly is producing where P = MC, a. allocative efficiency is satisfied b. the monopoly will earn economic losses c. profit for the monopoly will be equal to zero d. Both a and b are true. MC D MR Q 30 15 28 25 30 35...
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- Spring '11