\"ll Id} a.an...\"H.H.H.H......u....u. 6. Refer to Figure 16-4. Which of the panels depicts a rm in a monopolistically competitive market earning economic prots? a. panel (a) b. panel (b) c. panel (c) cl. panel (d) Marginal Cost $20 out!!! Marginal Revenue 7. Refer to Figure 15-7. To maximize total surplus, which outcome would a benevolent social planner choose? a. 100 units of output and a price of $10 per unit b. 100 units of output and a price of $20 per unit c. 120 units of output and a price of $10 per unit d. 150 units of output and a price of $15 per unit 8. When a monopoly increases its output and sales, what is the impact of the output effect and the price effect on total revenue? a. Both the output effect and the price effect work to increase total revenue. b. The output effect works to increase total revenue, and the price effect works to decrease total revenue. c. The output effect works to decrease total revenue, and the price effect works to increase total revenue. d. Both the output effect and the price effect work to decrease total revenue. Table 15-1 Quantity Price Total Revenue Average Marginal Revenue Revenue $35 $35 2 $64 $32 $29 3 $29 4 $17 5 $23 $11 6 $120 7 $17 -$1 8 -$7 $99 $11 -$13 9. Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold? a. b. $5 C. $8 d. $11 P MC ..: C Markup Qc 10. Consider that Figure 16-5 represents a monopolistically competitive firm. What does the level of output Q* * represent? a. excess capacity b. profit-maximizing output C. inefficient output d. efficient scale output11. A prot-maximizing rm in a monopolistically competitive market is characterized by which attribute? a. Average revenue exceeds marginal revenue. b. Marginal revenue exceeds average revenue. c. Average revenue is equal to marginal revenue. d. Total revenue is maximized along with prot. 12. Since natural monopolies have a declining average-cost curve, what effect would regulating natural monopolies by setting price equal to marginal cost have? a. It would cause the monopolist to operate at a loss. b. It would result in a less than optimal total surplus. c. It would maximize producer surplus. d. It would encourage research in order to recoup lost prots. 13. What happens when a prot-maximizing rm in a monopolistically competitive market is in long-run equilibrium? a. The demand curve will be perfectly elastic. b. Price exceeds marginal cost. c. Marginal cost is falling. cl. Marginal revenue exceeds marginal cost. MC ATC Markup Qc 14. Consider that Figure 16-5 represents a monopolistically competitive firm. What does the level of output Qc represent? a. excess capacity output b. profit-maximizing output C . inefficient output d. efficient scale 15. Consider the following: The profit-maximizing price charged for goods produced is $13. The intersection of the marginal-revenue and marginal-cost curves occurs where output is 10 units, marginal cost is $8, and average total cost is $7. What is the monopolist's profit under these conditions? a. $10 b. $40 C. $60 d. $80"ATC MR 16. Refer to Figure 15-2. What is the amount of profit of this monopoly firm? a. $5.75 b. $4.36 C. $8 d. $12.51 17. Where does a firm in a monopolistically competitive market operate? a. where marginal revenue is zero b. where price is equal to marginal cost C. on the rising portion of its average-total-cost curve d. on the declining portion of its average-total-cost curve 18. Let P = price, MR = marginal revenue, and MC = marginal cost. For a profit-maximizing monopolist, which relationship holds? a. P > MR = MC b. P = MR = MC C. P > MR > MC d. MR