Suppose that a monopolist has a constant average total cost of production and marginal cost of production equal to $6, and has a demand for its product represented as

1. Calculate the total and marginal revenue for each quantity produced and sold
2. Find the profit-maximizing (optimal) quantity produced and sold and the price/unit.
3. Calculate the profit or loss at the optimal quantity of production and sales.

1)The marginal social cost is A. the same as the marginal external cost. B. equal to the marginal private cost minus the marginal external cost. C. the same as the marginal private cost. D. equal to the marginal private cost plus the marginal external cost.

2)

The difference between the marginal social cost and the marginal private cost equals the

A.cost of producing an additional unit of a good.

B.marginal external cost.

C.marginal external benefit.

D.marginal private benefit.

3)

If the marginal social cost of a good equals the marginal private cost of the​ good, then the marginal external cost of of the good

A.

is zero.

B.

equals the marginal social cost.

C.

equals the marginal social benefit.

D.

equals the marginal private benefit.

4)

When production of a good results in an external​ cost, the unregulated competitive market equilibrium is inefficient because​ ________.

A.

MSC​ = MC

B.

MSC​ > MSB

5)

If production of a good creates an external​ cost, the amount of output where the marginal social benefit equals the marginal private cost is

A.

inefficient.

B.

inequitable.

C.

unattainable.

D.

efficient.

6)

he efficient quantity of output of a product with external costs of production is

A.

zero.

B.

where the marginal social cost curve and marginal social benefit curve intersect.

C.

as low as possible.

D.

where the demand curve and the​ producer's supply curve intersect.

C.

MSC​ = MSB

D.

MSC​ < MSB

Which of the following is not a fixed cost?

Insurance

Salaries

Property taxes

Cost of Goods Sold

Lease Equipment Cost and INSURANCE ON PLANT BUILDING of a Manufacturing Company is a Manufacturing Cost or a Non Manufacturing Cost (Period Cost) ? Explain With Example

The annual insurance premium for the factory building would be a: a. fixed cost, period cost, and indirect cost with regard to units of product. b. fixed cost, product cost, and direct cost with regard to units of product. c. variable cost, product cost, and direct cost with regard to units of product. d. fixed cost, product cost, and indirect cost with regard to units of product.

Classify each of the following costs as a period cost (nonmanufacturing) or a product cost (manufacturing). Sales Commission

Depreciation on manufacturing equipment

Insurance for the factory building

Marketing materials

Plastic used in production

Wages paid to factory supervisor

A. Period B. Product

- Factory supervisors’ salaries -> product cost or period cost and why?

- Speakers used in Sony home-theater systems -> variable or fixed cost and why?

- Insurance costs related to a Mary Kay Cosmetics' manufacturing plant -> variable or fixed cost and why?

A certain monopoly has a marginal cost that depends on the quantity produced. The marginal cost is MC = 4Q
The marginal revenue curve is: MR = 40 – 4Q
The demand curve is: D = 40 - 2Q

Fixed cost of production $10, variable cost is $5 per unit produced.

1. a) Graph the MR, MC and demand curves!

2. b) Which quantity the monopoly will produce at which price?

3. c) Calculate the profit!