O p2.q3Op4, q1O p1.0O p3, q2 14. Using the graph below, which of the following prices and quantities would result fromunregulated profit-maximizing pricing?SAP4P3P2P10q1MR92ATC93MCDQ

The firm will produce where the marginal revenue is equal to marginal cost to maximize its profit.…

Answered: 14. Using the graph below, which of the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following table represents a monopolistically competitive market and the short-run costs of a firm in this market: Q TC MC TR MR 40 60 1 50 54 2 59 51 70 48 82 45 95 42 6. 110 39 7 128 36 8 151 33 179 30 (a) Complete the table, showing your work. (b) What is the profit-maximizing choice of output and price for this firm? How much profit does this firm make? Will new firms enter this industry in the long run? Explain. (c) What is the main difference in the assumptions we make between a perfectly competitive market and a monopolistically competitive market? How does this difference impact the outcomes of the market (price, quantity, profit) for each firm? Discuss.
3. Profit Maximization with Limited Information. Joe Holiday is a monopoly provider of Fishing Reels in a remote fishing village on a barrier island off the Gulf Coast. Currently he is selling is BassMaster reels for $50 each. Joe doesn't know the precise demand function for fishing reels, but he estimates price elasticity of demand to be -2. If the reels cost Joe $30 each, is he maximizing profits? If not, what would be the profit maximizing price? Is $50 a profit maximizing price? Y/N (circle one) Profit Maximizing Price
4
16 The following table shows a monopolist's demand curve and the cost information for the production of its good. What will their profits equal? Quantity Price per Unit Total Cost 10 $100 $100 20 $80 $400 30 $60 $800 40 $40 $1,400 50 $20 $2,400 A $1,000 BO $1,600 CO $1,200 DO $800
8. Natural monopoly analysis The following graph shows the demand (D) for gas services in the imaginary town of Utilityburg. The graph also shows the marginal-revenue (MR) curve, the marginal-cost (MC) curve, and the average-total-cost (ATC) curve for the local gas company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per hundred cubic metres) 2 20 18 16 14 12 10 8 MR ATC MC 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Hundreds of cubic metres) D + Monopoly Outcome (? Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The gas company is experiencing economies of scale. The gas company is experiencing diseconomies of scale. The gas company must own a scarce resource. True or False: Without government…
I know that profit maximization for both a competitive and monopolistic market is MC=MR, however MR=P is applicable only in a competitive market and this is a monopoly. How do I solve this?
3. A monopolist who is the exclusive producer of cricket bats in the UK faces a demand curve defined by P = 100 – 2Q and a short-run total cost curve of TC = 300 + 20Q. a. Given the above information, compute total revenue, marginal revenue, and marginal cost for this producer, and identify the optimal quantity, the optimal profit, and the equilibrium price. [10 marks] b. Considering the information from your answer to bullet point a., represent the monopoly market structure graphically. [5 marks]

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14. Using the graph below, which of the following prices and quantities would result from unregulated profit-maximizing pricing? SA P4 P3 P2 P1 0 q1 MR 92 ATC 93 MC D Q