The table below gives the demand and cost data for a monopoly, in dollars.
Answer the next questions
on the basis of this information.
Assume that the goal of this firm is to maximize total profits.
The firm would produce ____ units of
output and realize a profit totaling _____.
2 units, $300
3 units, $600
4 units, $400
5 units, $200
e that this firm is a “nonprofit” that attempts to maximize output subject to the constraint
that its revenue covers its full cost
that is, AFC plus AVC.
The firm would operate at
3 units of output
4 units of output
5 units of output
6 units of output
Given identical cost conditions, a monologist is likely to charge a
Higher price and earn higher profits than a competitive firm
Higher price and earn lower profits than a competitive firm
Lower price and earn higher profits than a competitive firm
Lower price and earn lower profits than a competitive firm
If a monopolist produces at that output level where marginal cost exceeds marginal revenue, to
maximize profits the firm should
Increase output and increase price
Decrease output and increase price
Increase output and decrease price
Decrease output and decrease price