Question

Question 18 Refer to the figure below. If a market changes from perfectly competitve to a monopoly, what happens to the price and output levels? Price MC MR Demand Quantity O A. They move from point A to point B. B. They move from point B to point C. C. They move from point C to point B. O D. They move from point A to point C.

Answer 1

Q18
Answer
Option A
It moves from A to B

A perfectly competitive market in equilibrium at MC=P
at point A
A monopoly is in equilibrium at MR=MC level of output and charge price from the demand curve, then Q=Q1 and P=P1, the equilibrium is at point B
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Q20
ANswer
Option A

Q=6
P=$42 and ATC=30
Profit=(P-ATC)*Q
=(42-30)*6
=$72

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Q22
Option A
Economic efficiency is at MC=P where
Q=Q2 and P=P2