A pure monopolist's short-run profit-maximizing or loss-minimizing position is such that price:
A. equals marginal revenue.
B. will vertically intersect demand where MR = MC.
C. will always equal ATC.
D. always exceeds ATC.
Answer: B
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Refer to Table 17-6. The Hair Cuttery, a new hair salon, is ready to start hiring. The table above shows the relationship between the number of hairdressers the firm hires and the quantity of haircuts it produces
a. Suppose the price of haircuts is $8. Complete the table by filling in the values for marginal product and marginal revenue product. b. The Hair Cuttery is an input price-taker. Suppose the wage paid to hairdressers is $40 per day. What is the profit-maximizing number of hairdressers? c. Suppose the wage rate rises to $60 per day. (i) What happens to the firm's demand curve for hairdressers? (ii) What happens to the profit-maximizing quantity of hairdressers? d. Suppose the wage rate is $40 per day and the price of haircuts is now $10. (i) What happens to the firm's demand curve for hairdressers? (ii) What happens to the profit-maximizing quantity of hairdressers?
When industrial unions negotiate with an entire industry, wage gains come at the cost of
a. longer working hours b. worse working conditions c. reduced total employment d. worse products e. longer hours