1.A monopolist is forced to lower its price in order to sell another unit of its product. This describes the problem of (2 points)

persistent economic profits

market power

diseconomies of scale

economies of scale

diminishing marginal returns

2.Use the graph to answer the question that follows. (2 points)

Price MC H AC P-- M P N P, AR P, G MR O Quantity Q2 (units)$22 MC $20 $18 $16 $14 $12 Price $10 $8 $6 $4 Demand $2 MR 10 20 30 40 50 60 70 80 90 100 QuantityCompany B Retail outlets No retail outlets Company A Retail outlets $25, $25 $30, $15 No retail outlets $35, $35 $34, $20