Indicate whether the following statements are true, false, or uncertain.

Explain.

a. A profit-maximizing monopoly charges the highest price possible for its product.

b. Profit-maximizing monopolies are similar to profit-maximizing perfectly competitive firms in that P0 = MR.

c. It is possible to describe the market demand for the output of a perfectly competitive industry as price inelastic.

d. It is possible to describe the market demand for the output of a profitmaximizing monopolist as price inelastic.

e. Suppose that a monopolist employs only one factor of production and that marginal and average total cost are constant. A 10% increase in the price of that input will cause the monopolist to increase product price by 10%.

f. Suppose that a profit-maximizing monopolist can shift the linear demand curve for the firm’s product to the right by advertising. The monopolist’s total cost equation is TC = qQ, where q is a positive constant.

An increase in the price of advertising will result in an increase in the price of the monopolist’s output.