Problem 1. By using the information presented, asnwer the following question.
A monopoly faces the following demand curve and total cost curve:
Q = 2400 -100P
TC = 150,000 + 6Q.
Find the profit maximizing level of price
a. P = $15
b. P = $16
c. P = $17
d. P = 19
Problem 2. Find the profit maximizing output:
a. Q = 100 units
b. Q = 900 units
c. Q = 1000 units
d. Q = 90 units
e. Cannot be derived
Problem 3. The total cost (TC) of the monopolist corresponding to the profit maximizing level of output is:
a. $150,000
b. $206,000
c. $155,400
d. impossible to determine with the given information
e. $200,000
Problem 4. The average total cost (ATC)of the firm corresponding to the profit maximizing level of output is:
a. $166.66
b. $132.32
c. $160
d. $172.66
Problem 5. In the long run, new firms will keep entering a monopolistically competitive industry:
a. provided economies of scale are being realized.
b. even though losses are incurred in the short run.
c. until minimum average total cost is achieved.
d. until economic profits are zero.