Scenario $10\mathrm{.}4$:

The demand for tickets to the Meat Loaf concert $(Q)$ is given as follows:

$Q=120,000-2,000P$

The marginal revenue is given as:

$MR=60-\mathrm{.}001Q$

The stadium at which the concert is planned holds $60,000$ people. The marginal cost of each additional concert goer is essentially zero up to $60,000$ fans, but becomes infinite beyond that point.

Refer to Scenario $10\mathrm{.}4.$ Given the information above, what are the profit maximizing number of tickets sold and the price of tickets?

A$)0,$$$60$

B$)20,000,$$$50$

C$)40,000,$$$40$

D$)60,000,$$$30$

E$)80,000,$$$20$

Answer: D

Diff: $2$

Section: $10\mathrm{.}1$

$446$

Refer to Scenario $10\mathrm{.}4.$ Suppose that the municipal stadium authority imposes a tax of $$10$ per ticket on the concert promoters. Given the information above, the profit maximizing ticket price would

A$)$ increase by $$10.$

B$)$ increase by $$5.$

C$)$ not change.

D$)$ decrease by $$5.$

E$)$ decrease by $$10.$

Answer: B

Diff: $2$

Section: $10\mathrm{.}1$

A multiplant monopolist can produce her output in either of two plants. Having sold all of her output she discovers that the marginal cost in plant $1$ is $$30$ while the marginal cost in plant $2$ is $$20.$ To maximize profits the firm will

A$)$ produce more output in plant $1$ and less in the plant $2.$

B$)$ do nothing until it acquires more information on revenues.

C$)$ produce less output in plant $1$ and more in plant $2.$

D$)$ produce less in both plants until marginal revenue is zero.

E$)$ shut down plant $1$ and only produce at plant $2$ in the future.