A monopolist can earn an economic profit only when:
a. marginal cost equals marginal revenue.
b. marginal cost equals price.
c. average total cost is less than price.
d. all of these.
Question 2
Assume a consumer purchases a combination of goods X and Y such that MUx / Px = 20 units of utility per dollar and MUy / Py = 10 units of utility per dollar. To maximize utility, the consumers should buy:
a. neither X nor Y.
b. less of both X and Y.
c. more of both X and Y.
d. more of X and less of Y.
e. less of X and more of Y.
