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A monopolist is currently breaking even by producing 10 units of output for the total cost of $40. If the total cost of 9 units of output is $36, in order to maximize the profit, the firm should:

A. Reduce production
B. Keep the same production
C. Raise production
D. Shut down

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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Related questions

16. At the current level of output, a firm faces the following situation: P> AC > MC > MR. On the basis of this information, we can conclude that: (A) This is a monopoly firm that is currently producing too much output to maximize profit. It should shut down in the long run. (B) This is a perfectly competitive firm that is currently producing too much output to maximize profit. It should shut down in the long run. (C) This is a monopoly firm that is currently producing too little output to maximize profit. It should shut down in the long run. (D) This is a perfectly competitive firm that is currently producing too little output to maximize profit. It should shut down in the long run. (E) This is a monopoly firm that is producing the profit-maximizing output. It should continue to do what it is doing. (F) This is a perfectly competitive firm that is producing the profit-maximizing output. It should continue to do what it is doing. (G) This is a monopoly firm that is currently producing too much output to maximize profit. It should not shut down in the long run (H) This is a perfectly competitive firm that is currently producing too much output to maximize profit. It should not shut down in the long run. (1) This is a monopoly firm that is currently producing too little output to maximize profit. It should not shut down in the long run. (J) This is a perfectly competitive firm that is currently producing too little output to maximize profit. It should not shut down in the long run.

25. At the current level of output, a firm faces the following situation: AC > P= MR > MC > AVC. On the basis of this information, we can conclude that: (A) This is a monopoly firm that is currently producing too much output to maximize profit. If nothing changes, it should shut down in the long run. (B) This is a perfectly competitive firm that is currently producing too much output to maximize profit. If nothing changes, it should shut down in the long run. (C) This is a monopoly firm that is currently producing too little output to maximize profit. If nothing changes, it should shut down in the long run. (D) This is a perfectly competitive firm that is currently producing too little output to maximize profit. If nothing changes, it should shut down in the long run. (E) This is a monopoly firm that is producing the profit-maximizing output. It should continue to do what it is doing. (F) This is a perfectly competitive firm that is producing the profit-maximizing output. It should continue to do what it is doing. (G) This is a monopoly firm that is currently producing too much output to maximize profit. It should not necessarily shut down in the long run. (H) This is a perfectly competitive firm that is currently producing too much output to maximize profit. It should not necessarily shut down in the long run. (1) This is a monopoly firm that is currently producing too little output to maximize profit. It should not necessarily shut down in the long run. (J) This is a perfectly competitive firm that is currently producing too little output to maximize profit. It should not necessarily shut down in the long run.

25) If a perfectly competitive firm is producing an output at which price is equal to average total cost, the firm A) is making an economicprofit. B) is not producing its profit-maximizing quantity. C) is breaking even. D) should shut down. E) is incurring an economic loss.

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