Microeconomics Solved Assignments and Essays - Desklib

MICROECONOMICS
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Question 1: Option A
Reasoning: TC is sum of fixed cost and variable cost. Hence, from the given function is it
apparent that $300 is the fixed cost and $ 10 per unit is the variable cost. The variable cost is
also the marginal cost since it is the incremental cost incurred in the production of every
incremental unit since fixed cost remains the same.
Question 2: Option B
Reasoning: From the given demand curve, it is possible to predict the price and the
underlying quantity that the monopolist can sell at a given price. Hence, the revenue from
different combinations of price and quantity can be predicted.
Question 3: Option C
Reasoning: The profit maximisation occurs when MR=MC and hence output adjustment is
required to attain the same.
Question 4: Option C
Reasoning: The profit has been computed for all the levels where MR is greater MC and for 3
units, the profit maximisation occurs. Profit when Q =3 is 3*(8-5) = $ 9. This exceeds the
profit for any other output level.
Question 5: Option A
Reasoning: At this level, MR=MC which maximises the profit
Question 6: Option B
Reasoning: The price corresponding to quantity F is B. Also, as discussed at F output, the
profit is maximised.
Question 7: Option B
Reasoning: The price applicable is B while the quantity is F. Hence, revenue is multiplication
of price and quantity which would result in the chosen rectangle.
Question 8: Option C