Using the figure as a guide, which of the following is FALSE with respect to profit maximization and the monopolist?
A) A monopolist (like any other firm) will select an output rate at which marginal revenue is equal to marginal cost, at the intersection of the marginal revenue curve and the marginal cost curve.
B) The monopolist will produce quantity Qm and charge a price of Pm.
C) When compared to a competitive situation, consumers pay a higher price to the monopolist, and consequently are forced to purchase more of a product as price varies directly with quantity demanded.
D) Profits are the positive difference between total revenues and total costs.
C
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There is a negative relationship between two variables if
A) neither variable moves. B) they move in the same direction. C) they move in opposite directions. D) one variable changes and the other does not.
Suppose that Home is a capitalabundant country. When Home trades with Foreign, a laborabundant country, the HO model predicts that the price of:
a. the laborintensive good will rise in Home. b. the laborintensive good will rise in Foreign. c. the capitalintensive good will rise in Foreign. d. the capitalintensive good will fall in Home.