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1.
You are the manager of a firm that produces output in two plants. The demand for your firm's product is P
= 78- 15Q, where Q = Q
1
+ Q
2
. The marginal cost associated with producing in the two plants are MC
1
=
3Q
1
and MC
2
= 2Q
2
. How much output should be produced in plant 1 in order to maximize profits?
A. 1.
B. 2.
C. 3.
D. 4.
2.
You are the manager of a firm that produces output in two plants. The demand for your firm's product is P
= 78- 15Q, where Q = Q
1
+ Q
2
. The marginal cost associated with producing in the two plants are MC
1
=
3Q
1
and MC
2
= 2Q
2
. What price should be charged to maximize profits?
A. $20.5.
B. $40.5.
C. $60.5.
D. $80.5.
3.
You are the manager of a firm that produces output in two plants. The demand for your firm's product is P
= 78- 15Q, where Q = Q
1
+ Q
2
. The marginal cost associated with producing in the two plants are MC
1
=
3Q
1
and MC
2
= 2Q
2
. What price should be charged in order to maximize
revenues?
A. $39.
B. $47.
C. $52.
D. $56.
4.
Which of the following is true under monopoly?
A. Profits are always positive.
B. P > MC.
C. P = MR.
D. All of the choices are true for monopoly.
5.
You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's
cost function is C = 40 + 5Q
2
. The profit-maximizing output for your firm is
A. 4/5.
B. 10.
C. 5.
D. 45.

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's
cost function is C = 40 + 5Q
2
. Your firm's maximum profits are
A. 125.
B. 250.
C. 100.
D. 85.
7.
You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are
C = 5 + 30Q. The profit-maximizing output for your firm is
A. 4.
B. 5.
C. 6.
D. 7.
8.
You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are
C = 5 + 30Q. The profit-maximizing price is
A. 150.
B. 90.
C. 130.
D. 110.
9.
You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are
C = 5 + 30Q. Your firm's maximum profits are
A. 495.
B. 475.
C. 480.
D. 415.
10. You are the manager of a firm that produces output in two plants. The demand for your firm's product is P
= 120 - 6Q, where Q = Q
1
+ Q
2
. The marginal cost associated with producing in the two plants are MC
1
=
2Q
1
and MC
2
= 4Q
2
. How much output should be produced in plant 1 in order to maximize profits?
A. 3.
B. 6.
C. 9.
D. 12.
11. You are the manager of a firm that produces output in two plants. The demand for your firm's product is P
= 120 - 6Q, where Q = Q
1
+ Q
2
. The marginal cost associated with producing in the two plants are MC
1
=
2Q
1
and MC
2
= 4Q
2
. What price should be charged to maximize profits?
A. 60.

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