V4

Select the best answer for the questions below. 1. Suppose that a monopoly firm would make a greater profit if it raised its price by 15%. What is true about this monopoly's current marginal cost and marginal revenue? a) Marginal cost is greater than marginal revenue. b) Marginal cost is equal to marginal revenue. c) Marginal cost is less than marginal revenue. d) The relationship between marginal cost and marginal revenue cannot be determined based on given information. 2. Suppose that a monopoly firm would make a greater profit if it lowered its price. What will happen to the firm's total revenue if the price is lowered by 25%? a) Total revenue will rise. b) Total revenue will fall. c) Total revenue will stay the same. d) Change in total revenue cannot be determined from qiven information. 3. Suppose that a monopoly firm would make a greater profit if it lowered its price by 15%. What is true about this monopoly's current marginal cost and marginal revenue? a) Marginal cost is greater than marginal revenue. b) Marginal cost is equal to marginal revenue. c) Marginal cost is less than marginal revenue. d) The relationship between current marginal cost and marginal revenue cannot be determined from given information. 4. Consider a monopoly that is currently maximizing profits. Suppose the demand becomes less elastic but the quantity demanded at the current price does not change. The monopoly will price and production. a) increase; increase. b) increase; decrease. c) decrease; decrease. e) decrease; increase. f) not change; not change