### Monopoly Demand and Cost AnalysisThis graph illustrates the demand curve faced by a pure monopolist. It demonstrates how marginal revenue (MR) and marginal cost (MC) interact for a monopolist, helping to determine the profit-maximizing price and output.#### Graph Details:- **Axes**: - The vertical axis represents the price in dollars ($), ranging from 0 to 10. - The horizontal axis measures quantity, extending from 0 to 1,000 units.#### Curves:- **Demand Curve (Blue)**: Downward sloping, indicating that as the price decreases, the quantity demanded increases.- **Marginal Revenue Curve (Light Blue)**: Also downward sloping, positioned below the demand curve. It shows the additional revenue generated from selling one more unit.- **Marginal Cost Curve (Orange)**: Upward sloping, representing the additional cost of producing one more unit.- **Average Total Cost Curve (Green)**: U-shaped, indicating the average cost per unit over different quantities.#### Key Point:- **MR=MC Point**: The black dot marks where the marginal revenue equals the marginal cost, the condition for maximizing profit for the monopolist.#### Question:What is the monopolist's profit-maximizing price and output?To answer this, identify where the MR and MC curves intersect. At the intersection point, move vertically to find the corresponding price on the demand curve. This price-quantity combination maximizes the monopolist's profit. **Monopolist's Profit Maximization**To determine the monopolist's profit-maximizing price and output, refer to the given graph:- **Price (in dollars):** [Input Box for Price]- **Output (in units):** [Input Box for Output]Below the graph, consider the economic implications for long-run profitability.**Question: Are positive long-run profits possible under this market structure?**- ☐ Positive long run economic profits are possible if barriers to entry remain high.- ☐ Positive long run economic profits are definite.- ☐ Long run economic profits will be zero.**Graph Details:**- The x-axis represents Quantity from 0 to 1,000.- This setup helps identify where the monopolist achieves maximum profit, typically where marginal revenue equals marginal cost on the graph.Consider the impact of entry barriers on maintaining long-term profits for a monopolist.

100 200 300 400 500 600 700 800 900 1,000 Quantity What is the monopolist's profit-maximizing price and output? price: $ output: units Are positive long-run profits possible under this market structure? Positive long run economic profits are possible if barrriers to entry remain high. Positive long run economic profits are definite. Long run economic profits will be zero.

100 200 300 400 500 600 700 800 900 1,000 Quantity What is the monopolist's profit-maximizing price and output? price: $ output: units Are positive long-run profits possible under this market structure? Positive long run economic profits are possible if barrriers to entry remain high. Positive long run economic profits are definite. Long run economic profits will be zero.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A monopolist is able to maintain into the long run primarily because a. barriers to entry exist b. of collusive behavior c. of mutual interdependence d. of price taking behavior e. of product differentiation
Give typing answer with explanation and conclusion The inefficiency (dead-weight loss) of a monopoly (as compared to perfect competition) indicates the amount by which Group of answer choices price exceeds marginal revenue at a particular output level. consumer welfare is increased by the monopolist. price exceeds marginal cost at a particular output level. marginal benefits exceed marginal cost for those units not produced by the monopolist but that would otherwise be produced in a competitive market. marginal costs exceed marginal benefits for those units not produced by the monopolist but that would otherwise be produced in a competitive market.
a. At what output rate and price does the monopolist operate? b. In equilibrium, approximately what is the firm’s total cost and total revenue? c. What is the firm’s economic profit or loss in equilibrium?
Answer the question by referring to the table below. The table shows the demand curve facing a monopolistwho produces at constant marginal cost of 6. In short-run equilibrium, the monopolist will produceQuantity Price10 1020 930 840 750 660 5a) 20 unitsb) 30 unitsc) 40 unitsd) 50 units
a. what is the optimal quantity of goods for the firm to produce b. what is the optimal price for the quantity of goods for the firm to produce c. what is the total revenue for the firm d. what is the total cost for the firm e. what is profit/loss for the firm
What is the profit-maximizing (equilibrium) condition that a monopolist uses to set its quantity of output? Question 8Answer a. Marginal Cost = Marginal Revenue b. Price = Marginal Revenue c. Price = Average Cost d. Price = Marginal Cost e. Supply = Demand
Please no written by hand solutions 1. Assume the cost function for a monopolist is given by TC(q) = 30Q; the inverse demand function for the firms' output is p = 120 - Q, where Q is the total output. a. Find the profit-maximizing combination of price and quantity b. Estimate consumer surplus, producer surplus and the deadweight loss associated with this monopolist C. If this industry became perfectly competitive, explain and estimate the consumer surplus, producer surplus and deadweight loss of the industry d. Graph your answers for a, b, and c 2. Now assume that the monopolist above splits into two. Each of two firms has the cost function TC(q) = 30q. a. What are the firms' outputs in a Nash equilibrium of Cournot's model? b. Estimate the economic profits for each firm c. If firm 1 is the leader and firm 2 the follower, find the equilibrium outputs for the Stackelberg solution.
The demand curve for a monopolist is inelastic. Why?
Suppose a pure monopolist faces the following cost data, as shown by the table on the left, and the demand schedule, as shown on the right. a. Calculate the missing TR and MR amounts. Instructions: Enter your answers rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Answer is complete and correct. Production and Costs Demand Average Fixed Cost Average Variable |Average Total Total Marginal Quantity Demanded Total Marginal Revenue Price Product Cost Revenue Cost Cost $115 2$ 0.00 1 $60.00 $45.00 $105.00 $45 100 1 $ 100.00 2$ 100.00 2 30.00 42.50 72.50 40 83 2 $ 166.00 2$ 66.00 3 20.00 40.00 60.00 35 71 3 $ 213.00 $ 47.00 4 15.00 37.50 52.50 30 63 4 252.00 2$ 39.00 12.00 37.00 49.00 35 55 24 275.00 $ 23.00 6. 10.00 37.50 47.50 40 48 6. 2$ 288.00 $ 13.00 7 8.57 38.57 47.14 45 42 7 24 294.00 2$ 6.00 8. 7.50 40.63 48.13 55 37 8. 2$ 296.00 $ 2.00 9. 6.67 43.33 50.00 65 33 24 297.00 2$ 1.00 10 6.00 46.50…
Suppose that the monopolist's demand is: P = 8 – Q, and marginal revenue is: MR = 8 – 2Q. - The marginal cost is: MC = 2, and there is no fixed cost. a.Find out the profit maximizing output level. b.Specify the amount of economic profit or loss at the profit maximizing output. c.Calculate the price elasticity of demand at the profit maximizing point and explain it.