**A. Should produce more units**

B. has maximized profits.

C. is in a Nash equilibrium

D. Should produce fewer units

E. should exit the industry.

### Related Mcqs:

- When an oligopolist individually chooses its level of production to maximize its profits, it produces an output that is ?
**A. more than the level produced by a monopoly and less than the level produced by a competitive market**

B. less than the level produced by a monopoly and more than the level produced by a competitive market

C. less than the level produce by either monopoly or a competitive market

D. more than the level produced by either monopoly or a competitive market - When a oligopolist individually chooses its level of production to maximize its profits it charges a price that is ?
A. more than the price charged by either monopoly or a competitive market

B. less than the price charged by either monopoly or a competitive market

C. more than the price charged by a monopoly and less then the price charged by a competitive market

**D. less than the price charged by a monopoly and more than the price charged by a competitive market** - Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero-marginal cost of study production. If ABC publishing charges separate price for both products its best strategy is to charge price that when combined, total ?
A. Rs 85

**B. Rs 75**

C. Rs 80

D. Rs 60 - Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero marginal cost of study production. If ABC publishing engages in tying the two products its best strategy is to charge a combined price of ?
A. Rs 60

B. Rs 90

**C. Rs 85**

D. Rs 75 - Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?
**A. X to point Y**

B. X to point Z

C. Y to point X

D. Z to point X - Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?
**A. Z to point X**

B. X to point X

C. X to point Z

D. Y to point X - Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raises its price Rs40 per month the number of subscribers will fall to 20000 Using the midpoint method for calculating the elasticity what is the price elasticity of demand for cable TV in Small Town ?
**A. 1.4**

B. 0.66

C. 0.75

D. 2.0 - If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost the firm could increase profit if it ?
A. decreased production

B. maintained production at the current level

C. temporarily shut down.

**D. increased production** - Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
A. The aggregate supply curve shifts to the right by more than Rs 16 billion

B. The aggregate demand curve shifts to the left by more than Rs 16 billion

**C. The aggregate demand curve shifts to the right by more than Rs 16 billion**

D. the aggregate supply curve shifts to the left by more than Rs 16 billion - If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will ?
A. be flat (horizontal)

B. slope upward

C. slope downward

**D. be U-shaped.**