2010MRI8 10 12 14 16QUANTITY (Thousands of subscriptions)1820Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints.Complete the first row of the folowing table.Short RunQuantityPricePricing Mechanism(Subscriptions)(Dollars per subscription)ProfitLong-Run DecisionProfit MaximizationMarginal-Cost PricingAverage-Cost PricingSuppose that the government forces the monopolist to set the price equal to marginal cost.Complete the second row of the previous table.Suppose that the government forces the monopolist to set the price equal to average total cost.Complete the third row of the previous table.Under average-cost pricing, the government will raise the price of output whenever a firm's costs increase, and lower the price whenever a firm's costsdecrease. Over time, under the average-cost pricing policy, what will the local telephone company most likely do?Work to decrease its costsO Allow its costs to increasePRICE (Dollars per

Price Mechanism Quantity Price Profit Long run decision Profit Maximization 6000 60…

Answered: 20 10 MRI 8 10 12 14 16 QUANTITY…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Deadweight Loss and Demand Elasticity. Using the linked figure as a starting point, consider a similar product that has the same monopoly price and quantity ($18 and 200 doses), but a more elastic demand. The long-run marginal cost is the same ($8). a. A more elastic demand generates a market demand curve. C Price ($) $18 b C $8 Long-run marginal cost and market supply Market Demand :200 400 Doses of drug per hour
8. 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. PRICE (Dollars per gigabyte of data) 20 18 16 14 12 10 80 6 4 2 0 0 1 MR 2 3 4 5 6 7 QUANTITY (Gigabytes of data) 8 ATC MC 9 10 D Monopoly Outcome Which of the following statements are true about this natural monopoly? Check all that apply.
Refer to the accompanying table, which represents the costs and production for a monopolist. Price Quantity Fixed Cost Variable Cost $20 0 $10 $0 $18 1 $10 $5 $16 2 $10 $8 $14 3 $10 $18 $12 4 $10 $30 $10 5 $10 $44 1) At Q=2, the marginal cost of this firm is $ ____ 2)The profit made by this profit-maximizing firm is $ __
(a) Does a monopolistically competitive firm have an incentive to produce at the level of output that minimizes the average total cost at the long run equilibrium? Explain with a diagram. (b) Suppose CLP Holdings Limited is a natural monopolist with constant marginal cost. Draw a diagram to indicate the profit-maximizing level of output, the profit-maximizing price, and the size of the profit. If the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm’s marginal cost or its average total cost? Explain in detail with the diagram in part (i).
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.
M1
Quantity, price, total revenue, and total cost for a monopoly firm that produces cement are listed in the table below. Quantity, (Q) (tons) Price (P) Total Revenue (TR) Total Cost (TC) 11 $1,000$⁢1,000 $1,000$⁢1,000 $710$⁢710 22 $905$⁢905 $1,810$⁢1,810 $785$⁢785 33 $810$⁢810 $2,430$⁢2,430 $875$⁢875 44 $715$⁢715 $2,860$⁢2,860 $1,070$⁢1,070 55 $620$⁢620 $3,100$⁢3,100 $1,310$⁢1,310 66 $525$⁢525 $3,150$⁢3,150 $1,650$⁢1,650 77 $451$⁢451 $3,160$⁢3,160 $2,290$⁢2,290 Determine the firm's profit-maximizing price. Write the exact answer. Do not round.
Subpart 7
Dear tutor, please solve these multiple questions. Thank You! 11. If the demand shifts, then for a profit maximizing monopolist, A) price will change while quantity will remain constant.B) price will change and quantity will change.C) Both A and B.D) Neither A nor B. 30. A monopolist will spend resources to advertise its product so long as A) net profits increase.B) gross profits increase.C) demand increases.D) total revenue increases. 32. What aspects of a game are specified by "the rules of the game"? A) timing of players' movesB) payoffsC) information available to each playerD) All of the above 33. When neither player has a dominant strategy, A) game theory will not provide information.B) no Nash-Equilibrium exists.C) at least one Nash-Equilibrium exists.D) the game cannot be analyzed.
Question 4 Think a price making firm (monopolist) with a downward-sloping demand curve is one with a price elasticity of demand equal to-1. This is illustrated in the following diagram. P=AR 20 Expenditure stays the same as price changes TR AR = = Q d (TR) dQ Slope = b/Q 40 100 Diagram 5 Unit elastic demand (Pe=-1) MR = As price and quantity change by the same proportion, total revenue is the same at each price (the TR curve is horizontal). This gives the following TR, AR and MR equations: TR=b b -D (AR) Q = 0 Q As TR is constant at all outputs, so MR must equal zero. In diagram 5, what is the value of b in equation TR=b?
9. The kinked demand curve Wilke is a manufacturer in the oligopolistically competitive market for footballs. Two other manufacturers, Rawlding and Spaldon, compete with Wilke for football consumers. Wilke faces the kinked demand curve for footballs depicted on the graph. Initially, Wilke charges $30 per football, producing and selling 7 million footballs per year. PRICE (DOLLARS PER BALL) 36 35 34 33 32 31 30 29 28 27 28 5 в 7 8 FOOTBALLS (Millions of balls) 9 10 ? As an oligopolist, Wilke is a price maker. If Wilke raises the price of its football from $30 to $32 per ball, the quantity of Wilke footballs demanded million footballs per year. If Wilke reduces the price of its football from $30 to $28 per ball, the quantity of footballs demanded million footballs per year. (Hint: Mouse over the points on the graph to see their coordinates.) by by If Wilke lowers the price of its football below $30, the kinked demand curve model suggests that Rawlding and Spaldon will respond by
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