Price and cost (dollars)
1,000
900
MC
A
800
700
B
D
600
C
500
D
400
300
200
100
MR
0
1,000 2,000 3,000 4,000 5,000
Quantity
If the market in the figure above is a monopoly that maximizes its profit and charges every consumer the same price for
each unit of output the consumer buys, the consumer surplus is equal to
8)
A) area A. B) area B.
C) area C. D) area D.
9) A firm that faces a high-demand period followed by a low-demand period must determine all of the following for
peak-load pricing except which one?
9)
A) short-term peak price
C) short-term off-peak price
B) long-term peak quantity
D) long-run capacity
10) If Angelo's Pizza Restaurant has a constant marginal cost of $50 for each additional table in the restaurant and a
constant marginal cost of $12 for operating each additional table, what is Angelo's long-run marginal cost per table?
10)
A) $62 B) $50 C) $38 D) $12
11) In peak-load pricing, the capacity decision is determined by setting
marginal revenue equal to long-run
cost. 11)
A) peak; marginal
B) off-peak; marginal
C) peak; average fixed
D) off-peak; average fixed