PC and Monopoly Graphs *Reference Graphs*

1. Refer to the above diagram 1. Refer to the above diagram. To maximize profit or minimize losses this firm will produce: K units at price C. D units at price J. E units at price A. E units at price B.

2. Refer to the above diagram 2. Refer to the above diagram. At the profit-maximizing output, total revenue will be: 0AHE. 0BGE. 0CFE. ABGE.

3. Refer to the above diagram 3. Refer to the above diagram. At the profit-maximizing output, total fixed cost is equal to: 0AHE. 0BGE. 0CFE. BCFG.

4. Refer to the above diagram 4. Refer to the above diagram. At the profit-maximizing output, total variable cost is equal to: 0AHE. 0CFE. 0BGE. ABGH.

5. Refer to the above diagram 5. Refer to the above diagram. At the profit-maximizing output, the firm will realize: a loss equal to BCFG. a loss equal to ACFH. an economic profit of ACFH. an economic profit of ABGH.

6. Refer to the above diagram 6. Refer to the above diagram. To maximize profits or minimize losses this firm should produce: E units and charge price C. E units and charge price A. M units and charge price N. L units and charge price LK.

7. Refer to the above diagram. In equilibrium total revenue will be: NM times 0M. 0AJE. 0EGC. 0EHB.

8. Refer to the above diagram. In equilibrium total cost will be: NM times 0M. 0AJE. 0CGC. 0BHE.

9. Refer to the above diagram. In equilibrium the firm will realize: an economic profit of ABHJ. an economic profit of ACGJ. a loss of GH per unit. a loss of JH per unit.

10. In equilibrium which of the following conditions are common to both unregulated monopoly and to pure competition? MC = P MC = ATC MR = MC P = MR

11. Refer to the above diagram for a pure monopolist 11. Refer to the above diagram for a pure monopolist. If the monopolist is unregulated, it will maximize profits by charging: a price above P3 and selling a quantity less than Q3. price P3 and producing output Q3. price P2 and producing output Q2. price P1 and producing output Q1.

12. Refer to the above diagram for a pure monopolist 12. Refer to the above diagram for a pure monopolist. Suppose a regulatory commission is created to determine a legal price for the monopoly. If the commission seeks to provide the monopolist with a "fair return," it will set price at: P1. P3. P2. P4.

13. Refer to the above diagram for a pure monopolist 13. Refer to the above diagram for a pure monopolist. If a regulatory commission seeks to achieve the most efficient allocation of resources to this line of production, it will set a price of: P1. P3. P2. P4.

14. Refer to the above diagram for a pure monopolist 14. Refer to the above diagram for a pure monopolist. If a regulatory commission sets price to achieve the most efficient allocation of resources, it will have to: tax the monopolist P3 P1 per unit to prevent the monopolist from realizing an economic profit. subsidize the monopolist or the monopolist will go bankrupt in the long run. subsidize the monopolist P1P4 per unit to allow the monopolist to break even. tax the monopolist P1P2 per unit to prevent the monopolist from realizing an economic profit.

15. If a purely competitive firm is producing at some level less than the profit-maximizing output, then: price is necessarily greater than average total cost. fixed costs are large relative to variable costs. price exceeds marginal revenue. marginal revenue exceeds marginal cost.