What is a better pricing strategy for the monopolist? At this price, what are the total profits to the monopolist?
a. Bundle the goods at 4,500 . Profits=9,000
b. Bundle the goods at 6,000 . Profits=12,000
c. Bundle the goods at 5,000 . Profits=10,000
d. Bundle the goods at 9,500 . Profits=19,000
QUESTION 2The price elasticity of demand for a vertical demand curve is:
a. 0.
b. -1.
c. 1.
d. - infinity.
QUESTION 3In the case of pure monopoly:
a. one firm is the sole producer of a good or service which has no close substitutes
b. the firm's profit is maximized at the price and output combination where marginal cost equals marginal revenue
c. the demand curve is always elastic
d. a and b only
e. a, b, and c
QUESTION 4Purchasing a profitable supplier increases profit only if
a. You pay equal to the value of the company's inventory
b. You pay higher than the value of the company's future profits
c. You pay lower than the value of the company's discounted future profits
d. You pay lower than the value of the company's undiscounted future profits
QUESTION 5What is the total profit to the monopolist from selling the goods separately?
a. 12,000
b. 13,000
c. 11,000
d. 10,000
QUESTION 6The price elasticity of demand for a horizontal demand curve is:
a. 0.
b. -1.
c. 1.
d. - infinity.
QUESTION 7The profit-maximizing monopolist, faced with a negative-sloping demand curve, will always produce:
a. at an output greater than the output where average costs are minimized
b. at an output short of that output where average costs are minimized
c. at an output equal to industry output under pure competition
d. a and c
e. none of the above
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