a.) When a monopolist chooses the output that maximizes profits, we know that MR - MC, and also that P > MR. This is inefficient because

1. The monopolist is the only producer in the market

2. The monopolist fails to make transactions where the marginal benefit is greater than the marginal cost

3. There are entry barriers

4. The monopolistic is not minimizing costs

b.) A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.00 per unit. The marginal revenue of the 151 unit of output is

1. -$5.10

2. -$0.10

3. $5.10

4. $2.45