Price discriminating monopolist take to increase profits

Assignment Help Business Economics

Reference no: EM131169382

Suppose the price at which a monopolist is selling its output is $8, and the marginal revenue associated with the last unit of output sold is $7. Suppose further that the marginal cost of producing the last unit of output sold is $6. Which of the following actions should th enon price discriminating monopolist take to increase profits?

a. increase output, increase price

b. decrease output, decrease price

c. increase output, decrease price

d. decrease output, increase price

Reference no: EM131169382

Questions Cloud

Bank can safely reduce its amount of reserves : A bank can safely reduce its amount of reserves if: congress passed the Credit Card Accountability and Responsibility, and Disclousure Act in order to: Banks often have to sell their loans at fire-sale prices. With the decline in commercial and inves..

Spending enough on fighting pollution : “Pollution is causing $100 million worth of damage to the environment and we are only spending $1 million to reduce pollution. We are clearly not spending enough on fighting pollution.” Is this statement true? How can marginal analysis needed to answ..

Good definition of public good and free riders : When people decide to buy cars, they have to decide between fuel economy and other features. It is argued that there is a "public good" issue involved in this decision. Why might that be? How the existence of public-good characteristics affect the pr..

Divided between capital expenditures and labor : A company has 6800 dollars to invest, which must be divided between capital expenditures and labor. Each unit of labor costs the company 10 dollars, and each unit of capital costs 10 dollars. Therefore 10L+40K=6800, where L and K are the units of lab..

Price discriminating monopolist take to increase profits : Suppose the price at which a monopolist is selling its output is $8, and the marginal revenue associated with the last unit of output sold is $7. Suppose further that the marginal cost of producing the last unit of output sold is $6. Which of the fol..

Approximate difference in mu of shrimp vs lobster : Assume the price of large gulf shrimp is dollar 18 per pound and that the price of hard shell Maine lobster tails is dollar 36 per pound. Your professor uses 1/2 pound of lobster or 1/2 pound of shrimp with various pasta dishes. what is the approxima..

Producing its profit maximizing level of output : Suppose Marcy's Medical Machines operates in a perfectly competitive market and is producing its profit maximizing level of output. Suppose further that at this level of production, its average total cost is $2500, average variable cost is $2300, and..

Which of the two countries has higher relative wage : Suppose Australia is a capital (K)-abundant country, and Sri-Lanka is a labor (L)-abundant country. Both produce labor and capital intensive goods with the same technology. Which of the two countries has a higher relative wage, w/r, before trade? Wou..

Diminishing marginal returns to labor means : Diminishing marginal returns to labor means

User Account

All Pages