For a profit-maximizing monopolist, price A. equals marginal revenue. B. is less than marginal...
Question:
For a profit-maximizing monopolist, price
A. equals marginal revenue.
B. is less than marginal revenue.
C. is greater than marginal revenue.
D. can be greater than or less than marginal revenue.
MONOPOLY PRICES
Monopolies are firms that are single players in a market selling products that do not have close alternatives. The barriers to entry in the market are also high. Due to low or no competition in the market, monopolies have the power to set a price that maximizes their profits and not taking into account the equilibrium price.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe maximum profits for firms in the perfect market are attained by setting prices (P) at the level where marginal revenue corresponds with marginal...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
What is a Monopoly in Economics? - Definition & Impact on Consumers
from
Chapter 7 / Lesson 2
35K
Understand the meaning of a monopoly in economics and what it does. Also, know the characteristics of a monopoly and the different types of monopolies.
Related to this Question
- The profit-maximizing single-price monopolist will charge a price a. equal to marginal revenue. b. greater than marginal cost. c. less than marginal revenue, but greater than marginal cost. d. gre
- To maximize profits, a monopolist chooses the quantity where: a. marginal revenue equals zero. b. revenues are maximized. c. marginal cost equals zero. d. marginal revenue equals marginal cost. e. costs are minimized.
- To maximize profits, a monopolist chooses the quantity where: a. costs are minimized. b. marginal cost equals zero. c. marginal revenue equals zero. d. marginal revenue equals marginal cost. e. revenues are maximized.
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B) both sellers' profit-maximizing price will be greater than $
- For a monopolist, the price of a product: a) Is less than the marginal revenue. b) Exceeds the marginal revenue. c) Equals the marginal cost. d) Equals the marginal revenue.
- In the profit-maximizing monopolist sets it price: A. higher than a competitive market would. B. equal to marginal cost. C. where marginal costs equals marginal revenue. D. at whatever price it wants
- If, at the output where marginal cost equals marginal revenue, both a pure competitor's and a monopolist's marginal revenue is $5.00: A) both sellers' profit-maximizing price will be $5.00. B)) both s
- At the monopolist's profit-maximizing level of output: a. marginal cost is less than marginal benefit. b. marginal cost is greater than marginal benefit. c. marginal cost is less than marginal revenue. d. marginal cost is greater than marginal revenue
- A profit-maximizing monopoly will produce that output for which : a. Marginal revenue equals price, b. Average cost is minimized, c. Marginal cost is minimized, d. Marginal cost equals marginal revenue.
- For a monopolist that is maximizing profits, A. price equals average total cost. B. price equals marginal revenue. C. marginal revenue exceeds price. D. price exceeds marginal cost.
- Which of the following is true for the monopolist? a. Marginal revenue is less than the price charged. b. Economic profit is possible in the long run. c. Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. d. All of
- Which of the following is true for the monopolist? a. Marginal revenue is less than the price charged. b. Economic profit is possible in the long run. c. Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. d. All of the
- If a monopolist produces to a point at which marginal revenue is less than marginal cost then: a. profits are being maximized. b. profits will always be negative. c. the incremental cost of produci
- A single-price monopolist maximizes profits by producing at a price that is ______. a. less than marginal cost. b. greater than marginal cost. c. less than marginal revenue.
- Microeconomics At the output level that a monopolist produces to maximize profit? A. marginal cost equals marginal revenue. B. price is higher than marginal revenue. C. price equals marginal cost.
- If a monopolist is producing a quantity where marginal revenue is equal to $125 and the marginal cost is equal to $125, the monopolist should [{Blank}] to maximize profits. a. Increase production and lower the price, b. Decrease production and increase
- At the quantity where a single-price monopolist maximizes profit, price will be.. a. equal to marginal cost. b. equal to marginal revenue. c. less than marginal cost. d. greater than marginal cost. e. less than marginal revenue.
- For a monopolist, the price of product ________. (a) always equals the marginal revenue (b) is always less than the marginal revenue (c) exceeds the marginal revenue (d) always equals the marginal cost of the product.
- A rule for profit maximization is: A. Increase output if marginal revenue is greater than marginal cost B. Decrease output if marginal costs exceeds marginal revenue C. That profit is maximized at MC=
- When marginal revenue equals marginal cost, the firm: a. Should increase the level of production to maximize its profit, b. May be minimizing its losses rather than maximizing its profit, c. Must be generating positive economic profits, d. Must be generat
- A profit maximizing monopolist will hire labor up to the point where: a. marginal revenue equals than the wage rate. b. marginal revenue product is greater than the wage rate. c. marginal revenue equals the price of the product. d. marginal revenue produc
- The profit of a firm is maximized when: a. marginal revenue is greater than marginal cost b. marginal cost is minimum c. marginal revenue is equal to marginal cost d. marginal revenue is less than marginal cost e. marginal revenue is maximum
- Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit? A. Marginal revenue is less than price. B. Price equals marginal costs. C. Marginal revenue is equal to marginal cost. D. All of these
- Which of the following is true for the monopolist? a. Economic profit is possible in the long run. b. Marginal revenue is less than the price charged. c. Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. d. All of the
- Which of the following is true for monopolist? a. Economic profit is possible in the long run. b. Marginal revenue is less than the price charged. c. Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. d. All of the
- For a monopolist, marginal revenue is: a. equal to price, as it is for a perfectly competitive firm. b. less than price, whereas marginal revenue is equal to price for a perfectly competitive firm. c. equal to price, whereas marginal revenue is less than
- A monopolistic competitor will maximize profits by producing the quantity of output where a) marginal revenue is equal to marginal cost. b) marginal revenue is maximized. c) total revenue is maximized. d) price is maximized.
- Profit is: a. increased when marginal revenue is greater than marginal cost b. maximized when marginal revenue is greater than marginal cost c. equal to ((price - average cost) x quantity)
- If a monopolist is producing a quantity where marginal revenue is equal to $32 and the marginal cost is equal to $30, the monopolist should: a. increase production and increase the price to maximize profits. b. decrease production and increase the price
- If a monopolist's marginal revenue is MR = 15.5 - 3Q and its marginal cost is MC = 5, then what is the profit-maximizing quantity?
- If a monopolist produces to a point at which marginal revenue is greater than marginal cost then: (a) profits will always be negative. (b) the incremental cost of producing the last unit is less than the incremental revenue. (c) profits are being maximize
- If the (profit-maximizing) level of output that a monopolist produces is such that marginal revenue, marginal cost, and average total cost are equal at that level of output, then economic profits must
- If a monopolist produces to a point at which marginal revenue is less than marginal cost then: a. the firm should increase output. b. the firm should reduce output. c. the firm is maximizing profits. d. we do not know if the firm should increase or reduce
- In maximizing profits, a single-price monopolist will charge a price that is: a. Less than marginal cost, b. Equal to marginal cost, c. Greater than marginal cost, d. There is not enough information to answer the question.
- In monopolistic competition, profit is maximized by producing so that marginal revenue: A) equals price. B) equals average total cost but not marginal cost. C) equals marginal cost and which are less than price. D) is negative. E) equals marginal cost and
- The monopoly maximizes profit by setting: a. price equal to marginal cost b. price equal to marginal revenue c. marginal revenue equal to marginal cost d. marginal revenue equal to zero
- For a monopolist, marginal revenue is: a. Equal to price, as it is for a perfectly competitive firm, b. Less than price, as it is for a perfectly competitive firm, c. Equal to price, whereas marginal revenue is less than the price for a perfectly competit
- Suppose that a monopolist is maximizing its profits. Which of the following must be true? The monopolist has O maximized its total revenue. O set price equal to its average cost. O maximized the difference between marginal revenue and marginal cost.
- To maximize profit, a natural monopolist produces the level of output at which: a. marginal cost equals the minimum of the long-run average total cost. b. price equals average total cost. c. marginal revenue equals marginal cost. d. all of the above
- If a monopolist's marginal revenue is MR=22-4Q and its marginal cost is MC=4 then the profit-maximizing quantity is what?
- The competitive firm maximizes profit when it produces output up to the point where - price equals average variable cost. - marginal revenue equals total revenue. - marginal cost equals marginal revenue. - marginal revenue equals average revenue.
- Profit maximization occurs when: a. a firm expands output until marginal revenue is exceeded by marginal cost. b. a firm expands output until marginal revenue is equal to marginal cost. c. the price in the market is equal to the firm's marginal revenue. d
- A profit-maximizing firm will always produce at that output at which: A. marginal cost equals marginal revenue B. it minimizes its costs C. it operates at peak efficiency D. it maximizes its total revenue
- Both a perfectly competitive firm and a monopolist a. always earn an economic profit. b. maximize profit by setting marginal cost equal to marginal revenue. c. maximize profit by setting marginal cost equal to the average total cost. d. are price take
- A profit-maximizing monopolist that produces in the short run will a) produce the level of output where marginal revenue exceeds marginal cost by the largest amount. b) increase output as long as t
- Marginal revenue could equal price for a profit-maximizing firm _____.
- In monopolistic competition, the firm's optimal price is: A. equal to marginal revenue B. equal to marginal cost C. greater than marginal cost D. less than marginal cost
- Both a perfectly competitive firm and a monopolist a. always earn an economic profit. b. maximize profit by setting marginal cost equal to marginal revenue. c. maximize profit by setting marginal cost equal to average total cost. d. are price takers.
- What is the profit maximization condition for a monopoly? a. Where marginal cost is minimized. b. Where total revenues are maximized. c. Where price equals marginal cost. d. Where marginal revenue equals marginal cost.
- A perfectly competitive firm maximizes profit when: a. its marginal cost is minimum b. its marginal cost is greater than its marginal revenue c. its marginal revenue is equal to its marginal cost d. its marginal cost is negative e. its marginal revenue is
- 1. A monopolist faces an upward-sloping marginal cost curve. Its profit-maximizing quantity will be a. at the minimum point of the marginal cost curve. b. less than the (total) revenue-maximizing qua
- If a monopolist produces to a point at which marginal revenue is less than marginal cost then: a. Profits are being maximized, b. Profits will always be negative, c. The incremental cost of producing the last unit exceeds the incremental revenue, d. The i
- A monopolist: a. maximizes profit at the output where price equals marginal cost. b. charges a higher price than a competitive firm, ceteris paribus. c. is a price taker since it has market power. d. cannot earn an economic profit in the long run.
- If the marginal revenue curve for a perfectly competitive firm lies below its marginal cost curve, then: a. profit is maximized. b. profit can be increased by increasing the price. c. profit can be in
- A big difference between a competitive firm and a monopolist is that of a monopolist? a) Can always make positive economic profits. b) Does not set marginal revenue equal to marginal cost to maximize profits. c) Does not try to maximize profits. d) D
- A monopolist's profit-maximizing price and output correspond to the point on a graph A. where the price is as high as possible. B. where the average total cost is minimized. C. where marginal revenue equals
- The profit-maximizing quantity for a monopolist is found where marginal revenue equals marginal cost. How does the monopolist find the profit-maximizing price? a. It is equal to the height of the supply curve at the profit-maximizing quantity. b. It is eq
- A monopolist will maximize profit by producing the level of output at which a. marginal revenue equals marginal cost. b. the last unit of output produced adds the same amount to total revenue as to to
- When total revenue (TR) is increasing as a monopolist's output increases: a. Marginal revenue (MR) is equal to zero, b. Marginal revenue (MR) may be positive or negative, c. Marginal revenue (MR) is positive, d. Marginal revenue (MR) is negative.
- At a price of $20, the marginal revenue of a monopolist is $6. If the marginal cost of production is $4, what should the monopolist do in order to maximize profits? a. increase its price b. decrease its price c. keep its price at the same level
- 1. A monopolistic competitor wishing to maximize profit will select a quantity where: a. marginal revenue equals average cost b. marginal cost equals demand c. marginal revenue equals marginal cost
- A profit-maximising monopolist finds that at the present level of output, marginal revenue equals $60 and marginal cost is $40. The price for this output has been determined from the demand curve. What action should the monopolist take to increase profits
- When marginal revenue intersects marginal cost on a graph: A. a monopolist must go up to the demand curve to find the price. B. profits are maximized for a monopoly but not for a competitive firm. C. a monopolist prices the good at the point. D. a monopol
- A producer can raise profit by expanding output if: a. marginal revenue is equal to marginal cost b. marginal revenue to less than marginal cost c. marginal cost is negative d. marginal revenue is neg
- If marginal costs are zero, a monopolist will maximize profit by producing at the point where a) average revenue is zero. b) price is maximum. c) total revenue is maximum. d) marginal revenue is maximum.
- A monopolist is producing a level of output at which price is $8, marginal revenue is $5, average variable cost is $6, and marginal cost is $10. In order to maximize profit, the firm should: a. decrease price b. increase price c. keep price the same d. in
- A monopolist has equated marginal revenue to zero. The firm has: A. maximized profit. B. maximized total revenue. C. minimized cost. D. minimized profit. E. A. and B.
- Suppose a monopolist's marginal revenue equals marginal cost at an output of 100. Suppose the price is $200, and average cost is $50 at an output of 100. Which of the following is correct about the monopolist's profit? a. Profit = $250. b. Profit = $150
- In the short run, a profit-maximizing firm will expand output: a. as long as marginal revenue is greater than marginal cost. b. until marginal cost begins to rise. c. until marginal revenue equals average variable cost. d. until total revenue equals total
- If a monopolist sells one more unit of output: (a) marginal revenue rises because of the quantity effect. (b) marginal revenue rises because of the price effect. (c) the price will be below marginal revenue due to the quantity effect. (d) marginal rev
- A monopolist maximizes its profit when: A) the total revenue is maximized. B) the price is the highest. C) the total cost is minimized. D) the marginal revenue is equal to the marginal cost. E) the quantity sold is equal to the price.
- A monopolist will maximize its profit, when its: a) Total revenue is maximum. b) Marginal revenue is maximum. c) Marginal cost is equal to marginal revenue. d) Total cost is maximum.
- The monopolist's profit-maximizing quantity of output is determined by the intersection of which following two curves: a. Marginal cost and demand, b. Marginal cost and marginal revenue, c. Average total cost and marginal revenue, d. Average variable
- At the profit-maximizing level of output for a perfectly competitive firm, a. marginal revenue equals average total cost. b. marginal revenue equals average variable cost. c. marginal revenue equals marginal cost. d. average revenue equals average cost.
- For a single-price monopolist, marginal revenue falls faster than price (as output rises) because: a) in order to sell additional units, the price must be lowered on all units. b) profits are maximized when marginal cost equals marginal revenue. c) the fi
- If a monopolist is producing a quantity where marginal revenue is equal to $16 and the marginal cost is equal to $17, the monopolist should: a. continue producing at the current output and price to maximize profits. b. decrease production and decrease the
- The quantity that will maximize profit for monopolists will occur where ____. a. total cost exceeds total revenue by the maximum amount. b. marginal cost rises to equal marginal revenue. c. price equals marginal cost. d. marginal revenue exceeds the margi
- For a competitive firm, the level of output that maximizes profits is where marginal revenue {Blank} marginal cost, and for a monopolist, it is where marginal revenue {Blank} marginal cost. A. is equal to; is greater than B. is greater than; is equal to C
- At present output, a monopolist determines that its marginal cost is $18 and its marginal revenue is $21. The monopolist will maximize profits or minimize losses by A. Decreasing price and increasing
- If a profit maximizing monopolist faces a linear demand curve and has zero marginal cost, it will produce at : A elasticity of demand equals 1. B the lowest point of marginal profit curve. C All of
- Do firms really calculate marginal cost and marginal revenue to find the profit-maximizing output?
- In monopolistic competition, a firm should increase output whenever: A. marginal revenue is below marginal cost. B. price is above marginal cost. C. price is below marginal revenue. D. None of the above.
- A monopolist maximizes profit by: a. charging a price that equals its marginal cost. b. producing a level of output where marginal revenue equals marginal cost. c. charging the highest possible price on the demand curve. d. charging a price equal to the a
- A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and the marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's
- The profit-maximizing level of output for a perfectly competitive firm occurs where: a. marginal revenue equals price. b. marginal revenue equals marginal cost. c. total revenue equals total cost. d. average revenue equals average variable cost.
- If a profit-maximizing firm is producing an output level in which marginal revenue equals marginal cost, is this firm earning a profit? Explain.
- If marginal revenue exceeds marginal cost at the output produced, would a monopolist increase or decrease output? Explain.
- Since price [{Blank}] for a monopoly firm, the profit-maximizing monopoly firm does not produce the quantity of output for which price equals marginal cost. a. does not equal marginal revenue, b. does equal marginal revenue c. is higher for a perfectly
- If a perfectly competitive firm's marginal revenue is less than its marginal cost, the firm: A) should decrease its output to increase economic profit. B) should increase its output to increase economic profit. C) must be making an economic profit. D)
- A monopolist has set her level of output to maximize profit. The firm's marginal revenue is $20 and the price elasticity of demand is -3.0. Which of the following prices or price ranges describe the firm's profit-maximizing price? A. $0-9 B. $10-19 C. $20
- For a perfectly competitive firm, _______. (a) price is less than marginal revenue (b) there is no relationship between price and marginal revenue (c) price is greater than marginal revenue (d) price equals marginal revenue.
- If marginal cost exceeds marginal revenue at the output produced, would a monopolist increase or decrease output? Explain.
- The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves: a. Marginal cost and demand, b. Marginal cost and marginal revenue, c. Average total cost and marginal revenue, d. Average variab
- For any firm in any market, the profit-maximizing level of output is always at the point where: a. Marginal revenue equals average variable cost, b. Average total cost equals marginal revenue, c. Average total cost equals marginal cost, d. Marginal
- To maximize profits, a firm should produce output up to the point where _______. (a) marginal revenue equals marginal cost (b) price equals marginal cost (c) the gap between the demand curve and the ATC is the greatest (d) All of the above (e) Both (a) an
- When a profit-maximizing firm in a monopolistically competitive market is producing the long-run equilibrium quantity: a. its marginal revenue will exceed its marginal cost. b. its average revenue will equal its marginal cost. c. it will be earning positi
- For any firm in any market, the profit-maximizing level of output is always at the point where: a) marginal revenue equals average variable cost. b) average total cost equals marginal revenue. c) average total cost equals marginal cost. d) marginal re
- If a profit-maximizing firm is producing an output level in which marginal revenue exceeds marginal cost, should it produce more, less, or the same?
- For a monopolist, what is the relationship between price and marginal revenue (MR) at the profit maximizing output level?
Explore our homework questions and answers library
Browse
by subject