If a monopolist is producing at the profitmaximizing level o

If a monopolist is producing at the profit-maximizing level of output, what price will it charge? The price given by the average-cost curve at that level of output. The price given by the average-revenue curve at that level of output. The price given by the marginal-cost curve at that level of output. The price given by the total revenue curve at that level of output. The price given by the marginal-revenue curve at that level of output. Question 15 4 pts The perfectly competitive market structure results in economic efficiency because price is equal to marginal revenue in the short run. in the long-run, price is equal to marginal cost and minimum average-total-cost a normal profit is being earned in the long run. Ofirms are producing at the minimum point of the average-total-cost curve in the short run. a normal profit is being earned in the short run.

Solution

A profit maximising monopolist charges a price above the intersection of MR and MC, on the demand curve. The average-revenue curve is the demand curve.

Answer- the price is given by the average - revenue curve at that level of output.

A perfectly competitive market results in economic efficiency when it produces at a point where MR equals MC. In this market structure, price is equal to MR. So, production is efficient when price equals marginal cost. Now, when price equals minimum average total costs, it means that the market is earning normal profits.

Answer - in the long run, price is equal to marginal cost and minimum average total costs.

A monopolistically competitive market structure is characterised by huge amounts of advertisement. If a firm\'s competitor introduces new products, it cannot reduce advertising. So, best strategy is to introduce new products itself.

Answer - introduce new products in order to meet competitors head on.

A monopolist enjoys the greatest market power. Firms do not locate nearby to save travel cost. Example of this being restuarants. Restaurants are not located near one another. There are no barriers to entry in a monopolistically competitive market structure.

Answer- the number of firms decline over time as a result of economies of scale.