SCENARIO: HOME MONOPOLIST A Monopolist Faces a Demand Curve Given by P =

question 20

Multiple Choice

SCENARIO: HOME MONOPOLIST
A monopolist faces a demand curve given by P = 60 -2Q and has total
Costs given by TC = Q2.Its marginal revenue is MR = 60 - 4Q and its
Marginal cost is MC = 2Q.
Reference: Ref 9­5
(Scenario: Home Monopolist) Now suppose that the country in which
This monopolist is located decides to engage in international trade.The
World price of the product produced by the monopolist is $10.
Calculate the value of the firm's profits.

• A)$400
• B)$1,200
• C)-$1,600
• D)$25

---

Definitions:

Economy Can Produce

The maximum quantity of goods and services an economy can generate when it utilizes all its resources efficiently.

Combinations Of Output

Various possible quantities of different goods that can be produced or provided given certain resources and technology.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another.

Opportunity Cost

The worth of the best alternative that is given up to make a decision.