Exam 25:Monopoly-Part A

The Cleveland Visitors Bureau is the exclusive national marketer of weekend getaway vacations in Cleveland,Ohio.At current market prices,the price elasticity of demand is -.50.To maximize profits,the bureau should

A monopolist faces the inverse demand function described by p = 23 - 5q,where q is output.The monopolist has no fixed cost and his marginal cost is $6 at all levels of output.Which of the following expresses the monopolist's profits as a function of his output?

A monopolist faces the inverse demand curve p = 120 - 6q.At what level of output is his total revenue maximized?

A monopolist with constant marginal costs faces a demand curve with a constant elasticity of demand and does not practice price discrimination.If the government imposes a tax of $1 per unit of goods sold by the monopolist,the monopolist will increase his price by more than $1 per unit.

A monopolist faces the inverse demand curve p = 64 - 2q.At what level of output is his total revenue maximized?

If he produces anything at all,a profit-maximizing monopolist with some fixed costs and no variable costs will set price and output so as to maximize revenue.

A monopolist has decreasing average costs as output increases.If the monopolist sets price equal to average cost,it will

The demand for copies of the software package Macrosoft Doors is given by Q =10,000P ^{- 2}.The cost to produce Doors is C = 100,000 + 5Q.If Macrosoft practices cost plus pricing,what would be the profit-maximizing markup?

The demand for a monopolist's output is 6,000/(p + 2)²,where p is the price it charges.At a price of $3,the elasticity of demand for the monopolist's output is

Since a monopoly charges a price higher than marginal cost,it will produce an inefficient amount of output.

A firm has invented a new beverage called Slops.It doesn't taste very good,but it gives people a craving for Lawrence Welk's music and Professor Johnson's jokes.Some people are willing to pay money for this effect,so the demand for Slops is given by the equation q = 10 - p.Slops can be made at zero marginal cost from old-fashioned macroeconomics books dissolved in bathwater.But before any Slops can be produced,the firm must undertake a fixed cost of $30.Since the inventor has a patent on Slops,it can be a monopolist in this new industry.