133. Refer to Table 15-7. Sally will maximize her profits by selling
a.
3 pairs of shoes.
b.
4 pairs of shoes.
c.
6 pairs of shoes.
d.
7 pairs of shoes.
134. Refer to Table 15-7. What is total profit at the profit-maximizing quantity?
a.
b.
c.
d.
135. Refer to Table 15-7. What are Sally’s fixed costs?
a.
b.
c.
d.
136. Refer to Table 15-7. What is the total variable cost of production when Sally produces six pairs of shoes?
a.
b.
c.
d.
Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
Price
Quantity
Average Total Cost
$24
0
—
$18
5
$14.00
$12
10
$11.00
$6
15
$10.67
$0
20
$11.00
137. Refer to Table 15–8. How much extra revenue does the monopolist earn when he lowers the price from $18 to $12?
a.
$10
b.
$12
c.
$30
d.
$41
138. Refer to Table 15–8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?
a.
The firm saves $15.
b.
$15
c.
$30
d.
$40
139. Refer to Table 15–8. At what price will the monopolist maximize his profit?
a.
$6
b.
$12
c.
$18
d.
$24
140. Refer to Table 15–8. What is the maximum profit that the monopolist can earn?
a.
$10
b.
$20
c.
$30
d.
$40
Table 15-9
Consider the following demand and cost information for a monopoly.
Quantity
Price
Total Cost
0
$32
$6
1
$28
$20
2
$24
$34
3
$20
$48
4
$16
$62
5
$12
$76
141. Refer to Table 15–9. What is the marginal revenue of the 3rd unit?
a.
$4
b.
$12
c.
$20
d.
$28
142. Refer to Table 15–9. What is the marginal cost of the 4th unit?
a.
$4
b.
$14
c.
$31
d.
$62
143. Refer to Table 15–9. What price should the monopoly charge to maximize profit?
a.
$16
b.
$20
c.
$24
d.
$28
144. Refer to Table 15–9. At the profit-maximizing price, how much profit will the monopoly earn?
a.
$8
b.
$10
c.
$12
d.
$14
145. Refer to Table 15–9. What is the monopolist’s average total cost of production at the profit-maximizing price?
a.
$12
b.
$14
c.
$16
d.
$17
Table 15–10
The monopolist faces the following demand curve:
Price
Quantity
$10
5
$9
10
$8
16
$7
23
$6
31
$5
45
$4
52
$3
60
146. Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, what is the
profit-maximizing level of output?
a.
7 units
b.
16 units
c.
23 units
d.
31 units
147. Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, how much
profit can the firm earn at the profit-maximizing level of output?
a.
b.
c.
d.
Table 15–11
The following table shows quantity, price, and marginal cost information for a monopoly:
Output
Price
MC
0
$10
—
1
$9
$3
2
$8
$4
3
$7
$5
4
$6
$6
5
$5
$7
6
$4
$8
148. Refer to Table 15-11. What price should the firm charge to maximize its profit?
a.
$4
b.
$5
c.
$6
d.
$7
149. Refer to Table 15-11. What level of output should the firm produce to maximize its profit?
a.
2 units
b.
3 units
c.
4 units
d.
5 units
150. Refer to Table 15-11. What would be the firm’s marginal revenue at the profit-maximizing level of output?
a.
$7
b.
$6
c.
$5
d.
$1
Table 15–12
The following table provides information on the price, quantity, and average total cost for a monopoly.
Price
Output
ATC
$5
0
—
$4
4
$1.00
$3
8
$0.75
$2
12
$0.75
$1
16
$0.81
$0
20
$0.90
151. Refer to Table 15-12. At what price will the firm maximize its profit?
a.
$1
b.
$2
c.
$3
d.
$4
152. Refer to Table 15-12. In order to maximize profits, the firm should produce
a.
4 units of output.
b.
8 units of output.
c.
12 units of output.
d.
16 units of output.
153. Refer to Table 15-12. If the firm produces the profit-maximizing level of output, it will earn profits of
a.
$24.
b.
$18.
c.
$15.
d.
$12.
Table 15–13
The following table gives information on the price, quantity, and total cost of production for a monopolist.
Price
Output
Total Costs
$5
0
$3
$4
5
$8
$3
10
$20
$2
15
$33
$1
20
$53
$0
25
$78
154. Refer to Table 15-13. If the monopolist maximizes profits, he will charge a price of
a.
$4.
b.
$3.
c.
$2.
d.
$1.
155. Refer to Table 15-13. How much profit will the firm earn at the profit-maximizing price?
a.
$9
b.
$12
c.
$15
d.
$18
Table 15–14
The following table gives information on the price, quantity, and total cost of production for a monopolist.
Price
Output
Total Costs
$5
0
$3
$4
5
$8
$3
10
$18
$2
15
$33
$1
20
$53
$0
25
$78
156. Refer to Table 15-14. At what price does marginal revenue equal marginal cost?
a.
$5
b.
$4
c.
$3
d.
$2
Table 15–15
A monopolist faces the following demand curve:
Price
Quantity
$10
5
$9
10
$8
16
$7
23
$6
31
$5
45
$4
52
$3
60
157. Refer to Table 15-15. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-
maximizing level of output, the monopolist’s profit is
a.
$88.
b.
$8.
c.
$6.
d.
We do not have enough information to determine profit.
Table 15–16
A monopolist faces the following demand curve:
Price
Quantity
$10
5
$9
10
$8
16
$7
23
$6
31
$5
45
$4
52
$3
60
158. Refer to Table 15-16. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-
maximizing level of output, the monopolist’s average total cost is
a.
$9.00.
b.
$7.50.
c.
$6.74.
d.
$5.82.
Table 15–17
A monopolist faces the following demand curve:
Quantity
Price
10
$46
20
$42
30
$38
40
$34
50
$30
60
$26
70
$22
80
$18
90
$14
100
$10
159. Refer to Table 15-17. Which of the following statements best describes the relationship between the price and the
marginal revenue associated with values in the table?
a.
The price and marginal revenue are the same.
b.
The price is greater than or equal to the marginal revenue.
c.
The price is less than or equal to the marginal revenue.
d.
The relationship cannot be determined from the information given.
160. Refer to Table 15–17. If the marginal cost of production is constant at $18 per unit, this profit-maximizing
monopolist will choose to produce
a.
20 units.
b.
30 units.
c.
40 units.
d.
50 units.
Table 15–18
A monopolist faces the following demand curve:
Quantity
Price
0
$20
1
$18
2
$16
3
$14
4
$12
5
$10
6
$8
Suppose marginal cost is constant at $8 per unit.
161. Refer to Table 15-18. The monopolist’s total revenue from selling 4 units of output is
a.
$4.
b.
$16.
c.
$32.
d.
$48.
162. Refer to Table 15-18. The monopolist’s marginal revenue from selling the second unit of output is
a.
$8.
b.
$14.
c.
$16.
d.
$24.
163. Refer to Table 15-18. The monopolist’s marginal revenue is
a.
always more than the price of its good, beyond the first unit.
b.
always equal to the price of its good.
c.
always less than the price of its good, beyond the first unit.
d.
sometimes more and sometimes less than the price of its good.
164. Refer to Table 15-18. When the price effect on revenue is greater than the output effect, marginal revenue is
a.
positive. This occurs with the 3rd unit of output.
b.
positive. This occurs with the 4th unit of output.
c.
negative. This occurs with the 5th unit of output.
d.
negative. This occurs with the 6th unit of output.
165. Refer to Table 15–18 The monopolist’s profit-maximizing level of output is
a.
3 units.
b.
4 units.
c.
5 units.
d.
6 units.
166. Refer to Table 15-18. Suppose the firm depicted in the table is selling a prescription drug for which it had a patent,
but the patent has expired. As new firms enter the market and sell the generic version of this drug competitively, what
quantity will be sold?
a.
3 units
b.
4 units
c.
5 units
d.
6 units
Table 15–19
A monopolist faces the following demand curve:
Quantity
Price
0
$20
1
$18
2
$16
3
$14
4
$12
5
$10
6
$8
7
$6
8
$4
9
$2
10
$0
167. Refer to Table 15-19. If a monopolist faces a constant marginal cost of $9, how much output should the firm
produce?
a.
2 units
b.
3 units
c.
4 units
d.
5 units
168. Refer to Table 15-19. If a monopolist faces a constant marginal cost of $7, how much output should the firm
produce?
a.
3 units
b.
4 units
c.
5 units
d.
6 units
169. Refer to Table 15-19. If a monopolist faces a constant marginal cost of $5, how much output should the firm
produce in order to equate marginal revenue with marginal cost?
a.
3 units
b.
4 units
c.
5 units
d.
6 units
170. Refer to Table 15-19. If a monopolist faces a constant marginal cost of $3, how much output should the firm
produce?
a.
3 units
b.
4 units
c.
5 units
d.
6 units
171. Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm
produce in order to equate marginal revenue with marginal cost?
a.
3 units
b.
4 units
c.
5 units
d.
6 units
Table 15–20
A monopolist faces the following demand curve:
Quantity
Price
0
$30
1
$27
2
$24
3
$21
4
$18
5
$15
6
$12
7
$9
8
$6
9
$3
10
$0
172. Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, how much output should the firm
produce in order to maximize profit?
a.
2 units
b.
3 units
c.
4 units
d.
5 units