8/ Suppose that raw material costs fall for a monopolist. What is most likely to happen to profit, P, and Q?

Group of answer choices a/ profits rise, Q stays the same, P rises

b/ profits rise, Q rises, P rises

c/ profits rise, Q rises, and P falls

d/ profits rise, Q stays the same, P falls

e/ Can't tell without more information

f/ profits stay the same, Q stays the same, P stays the same

9/ At a monopolist's current output, ATC = $10, P = $11, MC = $8 and MR = $7. This firm is earning:

a/ we can't tell without more information

b/ an economic loss

c/ a positive economic profit

d/ an economic profit of zero

10/ What can we say about whether the firm in the prior problem (#9) is producing the right Q and charging the right P?

a/ It is charging the right P and selling the right Q

b/ It should lower P and raise Q

c/ It should raise P and Q

d/ It should raise P and lower Q

e/ It is impossible to know without more information.

11/Suppose that a nondiscriminating monopolist (meaning that they charge the same price to everyone) faces demand given in the following table. What is the MR of the 4th unit?

Price	Quantity
10	1
9	2
8	3
7	4
6	5

a/ 28

b/ 4

c/ 2

d/ 7

e/ -2

12/ If raw material costs for a perfectly competitive industry fall, which of the following is accurate?

a/ Firms lower prices in the short run and earn zero profit.

b/ Profits rise in the short run and the long run.

c/ Profits rise in the short run. This leads more firms to enter the industry, which causes prices to fall and profits to return to zero.

d/ Some firms lower prices in the short run while others do not. In the long run everyone earns the same profit.

13/ Suppose two firms in a monopolistically competitive industry face similar demand curves. The two firms have similar total costs, but one firm has high fixed costs and low variable costs, while the other has high variable costs and low fixed costs. Which of the following is true about the prices they should charge?

a/ They will charge the same price and sell the same amount of output

b/ The firm with lower variable costs will charge a lower price and sell more output.

c/ The firm with lower fixed costs will charge a lower price and sell more output.

14/ Suppose that you own an ice cream shop in a monopolistically competitive industry. Your costs include salaries for your workers, the cost of materials, and fire insurance on your building. If the insurance company raises rates for your firm, which of the following is true?

a/ You should not change the price you charge

b/ You should raise price and quantity

c/ You should raise price

15/ Suppose a monopoly faces the following: MC = 10, MR = 10, P = 20, ATC = 25, Q = 100.

Which of the following is true?

a/ The firm is losing money and should raise price

b/ The firm is earning zero profit and should not change price

c/ The firm should lower their price

d/ The firm is losing money and should not change price

e/ The firm is earning zero profit and should raise price

16/ Compared to a competitive firm, a monopolistically competitive firm:

a/ is less likely to advertise its product.

b/ can earn positive profits in the long run.

c/ faces a less elastic demand curve.

d/ faces a more elastic demand curve.