The Following Figures Show the Demand and Cost Curves of a Perfectly

question 16

Multiple Choice

The following figures show the demand and cost curves of a perfectly competitive firm and a monopoly respectively.Figure 11.7
D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
-According to Figure 11.7, which of the following statements is incorrect about the price P₁?

• A)The monopolist is maximizing profit at P_1.
• B)The price P₁ is not equal to the demand curve or marginal revenue for the perfectly competitive firm.
• C)The monopolist is earning normal profit at P_1.
• D)The monopolist sells 10,000 units of output at P_{1 .}
• E)The perfectly competitive firm produces 10 units of output at P_1.

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Definitions:

Direct Request

A straightforward form of communication where an individual asks for what they need or want clearly and explicitly.

Social Pressure

is the influence exerted by society or a social group on an individual to conform to group norms or behaviors.

Groupthink

A psychological phenomenon that occurs within a group of people, where desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Social Psychologists

Scientists who study how individuals think, influence, and relate to one another in social contexts.