1. For a monopolist, marginal revenue is ___________ (greater/less) than price.
2. A monopoly that cuts its price gains revenue from its ________customers but loses revenue from its ________customers.
3. At a price of $18 per CD, a firm sells 60 CDs. If the slope of the demand curve is $0.10, marginal revenue for the 61st CD is $ ________. The firm should cut the price to sell one more CD if the marginal cost is less than $________.
4. Arrow up or down: As the quantity produced by a monopolist increases, the gap between the marginal revenue curve and demand curve________.
5. To maximize profit, a monopolist picks the quantity at which________ equals________.
6. Arrows up or down: At a price of $18 per CD, the marginal revenue of a CD seller is $12. If the marginal cost of CDs is $9, the firm should________ its price to ________ the quantity.
7. You want to determine the profit-maximizing quantity for a monopolist. You can ask the firm’s accountant to draw the firms revenue and costs curves, but each curve will cost you $1,000. From the following list, indicate which curves you will request: average total cost, average fixed cost, average variable cost, marginal cost, demand, marginal revenue.