Question

1. A monopolist can increase profits by decreasing production if its currently producing at a point where:

Select one:

P = MC

P > MC

P < MR

MR = MC

2. The reason a monopoly creates a deadweight loss is that a monopolist charges a price that is _________ marginal cost.

Select one:

the same as

greater than

less than

None of the other choices is correct

3. A monopolist maximizes profits when it produces an output at the point where:

Select one:

None of the other choices is correct

P > MC

P = MC

MR > MC

P < MR

4. A monopolist knows an increase in price will have no impact on total revenue when its price elasticity of demand is:

Select one:

price inelastic

perfectly elastic

price elastic

equal to 1 (in absolute terms)