A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit
It may be concluded that at this monthly output rate, marginal revenue is A) $5 per unit, and the monopolist earns zero economic profits.
B) $6 per unit, and the monopolist earns economic profits of $2,000 per month.
C) $6 per unit, and the monopolist earns economic losses of $1,000 per month.
D) $6 per unit, and the monopolist earns economic profits of $3,000 per month.
D
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Farmer Brady sells wheat in a market where sellers are price takers. Which of the following is true in regard to Farmer Brady's production and pricing decisions?
a. Farmer Brady will be able to increase the total revenue from the sale of his wheat if he increases the price of the wheat. b. Since the market dictates the price of his product, Farmer Brady will have no incentive to minimize per-unit production costs. c. Since the market dictates the price of his product, Farmer Brady has no production decisions to make. d. It would be senseless for Farmer Brady to try to increase sales by lowering the price of his product. His entire output can be sold at the market price.
Which of the following is not included in national income?
a. Corporate profits b. Interest earnings c. Capital consumption allowance d. Rental income e. Stockbroker commissions