# Are no fixed costs of production what price should

• Test Prep
• 6
• 94% (325) 304 out of 325 people found this document helpful

This preview shows page 2 - 4 out of 6 pages.

##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 12 / Exercise 3
Exploring Microeconomics
Sexton
Expert Verified
are no fixed costs of production. What price should the monopolist charge in order to maximize profit? A) None of these. B) \$38. C) \$42. D) \$21. E) \$2. Feedback: The monopolist should produce the quantity where Marginal Revenue equals Marginal Cost, and charge the highest price allowed by the demand curve at that quantity.
Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): D 3. A monopolist faces a demand curve given by: P = 40 –Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to \$2. There are no fixed costs of production. What is the deadweight loss associated with this monopoly?
##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 12 / Exercise 3
Exploring Microeconomics
Sexton
Expert Verified
Feedback: Deadweight loss is equal to (P M -P C) *(Q C -Q M )/2. Table for Individual Question Feedback Points Earned: 1.0/1.0
4. A monopolist faces a demand curve given by: P = 210 – 5Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to \$60. There are no fixed costs of production. How much profit will the monopolist make?