A monopoly incurs a marginal cost of 1 for each unit produced. If ...

[stephzh]

A monopoly incurs a marginal cost of 1 for each unit produced. If the price elasticity of demand equals -2.0, the monopoly maximizes profit by charging a price of
 
  A) 1.00.
  B) 1.50.
  C) 2.00.
  D) 3.00.

Question 2

If a firm is operating at an output level where losses are minimized, the firm
 
  A) has no incentive to stay in the industry.
  B) is better off exiting the industry.
  C) is maximizing profits.
  D) will shut down.

[kjo;oj]

Answer to Question 1

C

Answer to Question 2

C

[stephzh]

Thank you

[kjo;oj]

No problemo