If inventories are being depleted, firms may respond by cutting prices

Consider the following cost information for a monopolist: its MR = $15, its MC = $23, and it is producing 9 units of output. Which of the following statements is correct?

a. The monopolist should produce and sell 9 units of output. b. The monopolist should increase production of output. c. We need more information to decide if the firm needs to produce. d. The monopolist should not produce this output because MR < MC.

Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of dairy cows. If the demand for milk is relatively inelastic, the discovery will

a. raise both price and total revenues. b. lower both price and total revenues. c. raise price and lower total revenues. d. lower price and raise total revenues.