What is the formula for maximizing profit?
I. A firm with market power maximizes profit by producing so that P = MC or MR = MC.
What is the gain from selling an additional unit at the market price?
A) the gain from selling an additional unit at the market price less the loss in revenue from lowering the price on the previous units.
What is market power?
A) market power; a government-sanctioned barrier to entry
What is profit maximizing output?
A) The profit maximizing output is the one at which marginal revenue and marginal cost are equal.
What is the meaning of "e" in the equation of profit maximizing output?
E) At the profit maximizing output, price equals marginal cost.
What is quantity supplied at any particular price dependent on?
A) the quantity supplied at any particular price depends on the monopolist's demand curve.
Is average revenue equal to price?
I. For a monopolist, at every output level, average revenue is equal to price.