2. Consider the market and cost structure represented in the diagram. a) Does the firm have market power? How do you know? b) What would be the amount of output supplied if the market were being served by a monopolist? c) What would be the price? P 90 80 70 60 50 40 30 20 MC Isoprofit
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- The graph shown represents the cost and revenue curves faced by a monopoly What profit is earned by the monopolist in the short run? 18 17 16 15 14 18 17 16 S 15 14 13 12 11 10 9 8 87654321 6 5 2 1. $420 2. $250 3. $500 4. $1000 MC MR ATC D 5707530% 55% 65838% Quantity I have submitted this question prior and received the answer as $250. However, I was counted wrong for this answer. When solving, please explain step by step how the answer is comprised. I understand the MC and MR connection at 8*50= 400, but the profit, how did you come to the resolution of 5*50???Exercise A.3 Compare the competitive equilibrium with that of the first-degree price discriminating monopolist. Indicate the similarities and differences that exist in prices, quantities produced, consumer surplus and loss of efficiency between both situations. Represent graphically assuming that the marginal cost is constantFigure 6 Price $95 and cost per unit 70 59 35 20 panja 580 835 MR 1740 2204 ATC MC D Quantity 12) Refer to Figure 6 to answer the following questions. a) What quantity will this monopoly produce and what price will it charge? b) Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge? c) To achieve economic efficiency, what quantity will the regulated monopoly produce? d) Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency? e) Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35. What quantity will the monopoly produce and what price will the monopoly charge? f) With the price ceiling of $35, what profit will the monopoly earn?
- MindTa x Login × Login X Bb Salt W X m statican bruisevos index.hamladeploymentid=59400022675212682010495789084&elSBN=9781887912426&id=1639810498&snapshot d=32 CENGAGE MINDTAP Homework: Between Competition and Monopoly PRICE (Dollars per bike) 500 350 300 150 中興路 250 A G বন্ধ Content X MC 0 100 AC MR 150 Demand 250 300 350 QUANTITY (Bikes) 400 450 500 Cenga X Cenga X M Inbox 12 % Monopolistically Competitive Outcome 分会 Profit or Loss Given the profit-maximizing choice of output and price, the shop is earning positive profit, which means there are an equal number of shops in the industry than in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. Show the possible effect of free entry and exit by shifting the demand curve for a typical individual producer of bikes on the following graph. + Q SeaP(sunits) МC 25 23 20 15 13 D Units 40 45 50 In the diagram above, suppose the government imposes a price ceiling of $23. With the imposition of the price ceiling, the profit the monopolist will accrue is: $600 а. b. $1,000 c. $1,150 d. Can't tell; insufficient information(units) Price per Unit Quantity Demanded Total Cost of Production (dollars) $85 10 $530 80 11 540 75 12 550 70 13 560 65 14 575 60 15 595 55 16 625 A monopoly producer of foreign language translation software faces a demand and cost structure as given in the table. What is the firm's profit-maximizing output and what is the price charged to sell this output? [HINT: Find TR, MR and MC then use the profit maximizing condition] = OA. P $80; Q = 11 = B. P $70; Q 13 C. P $85; Q = 10 O D. P= $65; Q = 14
- 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. Consider a monopolist who faces the following demand: Demand: P= 100 – 10Q MC= 50+20 a) Find the price quantity combination that maximizes profit for the monopolist. b) Is the firm making positive, negative or zero profits? (100,100) Kareem chooses (60, 105) (500, 400) Saleem chooses Kareem chooses (50,420) 4. Calculate the SPNE/SPNES for the game stated above.ASAP 1) Compute the profit-maximizing advertising budget for a monopoly firm using the following pieces of information(a) The company is expected to sell $50 million worth of the product(b) It is estimated that a 1% increase in the advertising budget would increase the quantity sold by 0.04%(c) It is estimated that a 1% increase in the product's price would reduce quantity sold by 0.2%
- Exercise A.2 Explain why monopoly means less social welfare. Is there any kind of price discrimination that does not generate loss of social welfare? Graphically represent the two situations.90 80 MC 65 55 52 50 ATC D MR 10 20 35 45 50 Quantity of Output (Units) Refer to the graph above for a pure monopolist: The total profit (loss) for this monopolist is: ($525) $100 $525 $175 Dollars ($)Suppose you own a tax preparation services company, with fixed costs of $3,000/month and marginal costs of $25/appt.If the price is $60/appt, 500 appointments would be sold. If the price is $50/appt, 760appointments would be sold. a.)Use these figures to calculate the price elasticity of demand for your services. b.)Calculate the monthly profits and profit margins (profit/revenue) associated with the price of $60/appt and $50/appt. c.)Given these calculations, what price should you charge for your services, $50/apptor $60/appt? Explain
