Question 1
If there is no output for which
TR >
TC, a monopolist
◦ will still earn a positive economic profit.
◦ will not earn a positive economic profit.
◦ will break even.
◦ must shut down.
Question 2
The Stay-Dry Company monopolizes the sale of umbrella hats. The company is currently setting marginal revenue equal to marginal cost and selling 2,500 umbrella hats at a price of $40 each. Total costs for the company are $180,000 of which fixed costs are $90,000. You are hired as an economic consultant to this company. You should advise this monopolist to
◦ shut down in the short run and exit the industry in the long run.
◦ produce in the short run and expand capacity in the long run.
◦ produce in the short run but exit the industry in the long run if conditions do not change.
◦ shut down in the short run but expand capacity in the long run if conditions do not change.
Norway lobsters on sale at a Spanish market
Public setting
The Stillwater Mining Company
The Shifting Global Setting
Health care setting.
A company that sells sweatshirts finds that the profit can be modelled by P(s)= ...