Answer the following questions true (T) or false (F)
1. If a monopolist's price is $50 and average total cost is $43, then the average profit is $7.
2. If a monopolist's marginal revenue is $15 per unit and its marginal cost is $25, then to maximize profit the firm should decrease output.
3. In the short run, even if a monopoly's total revenue does not cover its variable costs, it should continue to produce because ultimately in the long run, the monopoly will start earning profits.
1. TRUE
2. TRUE
3. FALSE
You might also like to view...
What is the distinction between innovation and invention?
The expenditure approach for the calculation of GDP includes spending on:
a. consumption, gross private domestic investment, government spending for goods and services, and net exports. b. consumption, investment, durable goods and exports. c. consumption, gross private domestic investment, government spending for goods and services, and exports. d. consumption, net private domestic investment, government spending for goods and services, and net exports.