mod 61

Mr. Porter sells 10 bottles of champagne per week at a price of $50 per bottle. He can sell 11 bottles per week if he lowers the price to $45 per bottle. The quantity and the price effects on total revenue would be, respectively

an increase of $45 and a decrease of $50. ( bc 45x10 =450 and 45x11=495; increase of $45) (TR: 50x10=500 45x10=450; difference is 50) i'm a little confused abt this)

Compared to perfect competition, a monopoly

monopoly may have economic profits in the long run, but in perfect competition economic profits are zero in the long run.

A monopoly is likely to ________ units of output and ________ price than a perfectly competitive firm.

produce fewer; charge a higher

A monopolist has market power while a perfect competitor does not. True or False?

True

After the first unit sold, the marginal revenue a monopolist receives from selling one more unit of a good is less than the price at which that unit is sold because of:

diminishing marginal returns.