1. Assume that at a given level of output a monopoly firm has marginal revenue of $10, its product price is $15, and its marginal cost is $12. All of the following are true except:
A) the firm should increase price.
B) the firm is earning an economic profit.
C) the firm is earning losses.
D) the firm should reduce price.
2. Herbert Simon:
A) believed that firms are willing to settle for less than maximum profits.
B) believed that firms always maximize profits even if they have less than perfect information.
C) believed that individual managers in firms act like entrepreneurs and maximize profits.
D) was a neoclassical economist.
These multiple choice questions belong to Economics and the 1st question is about monopoly with marginal revenue and cost given for a level of output. The 2nd question is about Herbert Simon’s views.
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