Author Question: If a monopolist finds that at the present level of output marginal revenue exceeds marginal cost, ... (Read 41 times)

Redwolflake15 · **on:** Jun 30, 2018

If a monopolist finds that at the present level of output marginal revenue exceeds marginal cost, the firm should:
a. shut down.
b. expand output.
c. maintain the current output.
d. reduce output (but still produce).
e. raise prices.

Question 2

The MU/P equalization principle means consumers will exhaust their expenditure budget so that, in the end, the MU/P ratio is:
a. zero for each good.
b. higher for goods the consumer wants the most.
c. maximized for the goods the consumer wants the most.
d. higher than TU/P.
e. the same for each good.