2-) Hypothetical monopoly costs and revenue Quantity Price Total cost $500 $400 2 450 650 3 400 950 350 1,300 300 1,700 Table 1 In Table 1, using the profit-maximization rule, calculate MC, MR and write the profit- maximization quantity and the price:
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- Sub : Economics ( Regulating a natural monopoly)Pls answer Fastt. i ll upvote. Thank YouPlease see the images of the article below and help answer questions. 1. Evaluate this statement: "Whereas a competitive firm must sell at the market price, a monopoly owns its market, so it can set its own prices. Since it has no competition, it produces at the quantity and price combination that maximizes its profits." Must a perfectly competitive firm sell at a market-clearing price? Alternatively, is the market-clearing price the profit-maximizing price that a competitive firm chooses to set? Can a monopolist set any (price, quantity) combination? 2. Evaluate this statement: "Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of." Cite a counter-example to this claim in which deregulation of a monopolist led to lower…3. 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. (? 20 18 Monopoly Outcome 16 14 12 10 8 ATC MC MR D 1 6 7 8 9 10 QUANTITY (Hundreds of cubic feet) Which of the following statements are true about this natural monopoly? Check all that apply. O It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. O The gas company must own a scarce resource. The gas company is experiencing economies of scale. O In order for a monopoly to exist in this case, the government must have intervened and created it. True or False: Without government regulation,…
- QUESTION 22 For a monopoly firm: A. total revenue is a straight, B. the marginal revenue curve lies C. the marginal revenue curve lies O D. the marginal revenue curve upsloping line because a firm's sales are independent of above the demand curve because below the demand curve lies below the demand curve any reduction in price applies to because any reduction in price because any reduction in all units sold applies to all units sold price applies only to the product price extra unit sold(Short-Run Profit Maximization) Answer the following questions on the basis of the monopolist's situation illustrated in the following graph. 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?2. A monopoly faces an inverse demand function p = 90-Q, has a constant marginal and average cost of 30, and can perfectly price discriminate. a) What is its profit? b) What are the consumer surplus, total surplus, and deadweight loss? c) How would these results change if the firm were a single-price monopoly? 1 / 3
- TC 50 TR 40 30 20 10 10 15 20 25 30 Quantity (units per day) 34) The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is positive if it produces between A) 0 and 20 units. B) 5 and 20 units. C) 0 and 15 units. D) 0 and 5 units. Total revenue and total cost (dollars per day)5(c) Airlines practice price discrimination by charging leisure travelers and business travelers different prices. Why do you think by charging different prices; the airline companies will maximize their profits? Discuss briefly.
- 3. Natural monopoly analysis The following graph gives the demand (D) curve for satellite TV services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local satellite TV 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 subscription) 100 90 80 70 60 50 40 30 20 10 0 0 2 4 MR True 10 12 14 QUANTITY (Number of subscriptions) 16 False ATC MC 18 20 D Which of the following statements are true about this natural monopoly? Check all that apply. Monopoly Outcome In order for a monopoly to exist in this case, the government must have intervened and created it. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The satellite TV company must own a scarce resource.…A monopolist is faced with the following cost and revenue curves:(picture) a.What is the maximum-profit price and output,total revenue, total cost and profit? b.If the monopolist were ordered to produce 300 units, what would be the market price and how much profit would now be made c.If the monopolist were faced with the same demand, but average costs were constant at £60 per unit, what output would maximise profit? What would be the price now?................................................................................................. (j) How much profit would now be made? ................................................................................... (k) Assume now that the monopolist decides not to maximise profits, but instead sets a price of £40. How much will now be sold? .................................................................................................................................................. (l) What is the marginal revenue at this…3. Natural monopoly analysis The following graph gives the demand (D) curve for 5G LTE services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local 5G LTE 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. 18 16 2006 ± 14 12 1 PRICE (Dollars per gigabyte of data) ° 00 2 Monopoly Outcome ATC MC D MR 0 + + 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Gigabytes of data)