Author Question: A monopoly firm is charging the price the market will bear at a level of output where MC equals 22 ... (Read 57 times)

HudsonKB16 · **on:** Jun 30, 2018

A monopoly firm is charging the price the market will bear at a level of output where MC equals 22 and is increasing, MR equals 20, and average variable cost equals 17 . To maximize profits, the firm should:
a. increase both output and price.
b. increase output but decrease the price.
c. decrease output and increase the price.
d. decrease both output and price.

Question 2

According to strategic trade policy, international trade largely involves firms that:
a. enjoy monopolistic power in the domestic market.
b. have a high initial cost of production.
c. pursue economies of scale.
d. have high opportunity costs.
e. generate adequate employment in the domestic economy.