1. In maximizing economic profit, the monopolist will
a. choose the highest price that still permits some output sales.
b. equate marginal cost to minimum average total cost.
c. equate price to marginal cost.
d. equate marginal revenue to marginal cost.
2. Which of the following statements is FALSE?
a. Other things being equal, society's overall well-being is reduced when a perfectly competitive industry is monopolized.
b. When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve, the monopolist offers a lower level of output for sale.
c. The profit-maximizing monopolist will always produce only along the inelastic portion of the demand curve, whereas equilibrium in a perfectly competitive industry always occurs along the elastic portion of the demand curve.
d. When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve, the monopolist charges a higher price for its product than what would be charged in a perfectly competitive situation.