21 The situation in which one firm can produce the total output of the marketat lower cost than several firms is calledAnatural monopoly.pure monopoly.ruling monopoly.cost monopoly.ВD22 Each member of a cartelagrees to reduce output lower than it would if it were acting independently.is operating illegally in every country in which it is doing business.sets output independently of the impact on other members.makes less money than it otherwise would.AВD23 If a cartel is unable to monitor its members and punish those firms thatviolate their agreement, thenthe member firms will each act as price setters.the cartel will prosper in the long run.the market will become a monopoly.AВDthe cartel will fail.24 Compared to a cartel, firms in a Cournot Oligopolymake more joint profit.sell less output.make less joint profit.act independently.AВCD25 Mergers may result inanticompetitive behavior.more efficient production.AВfewer firms in a market.All of the above.26 Firms in an oligopolistic marketattempt to predict the behavior of other firms; strategically interdependentform cartels; unable to predict the behavior of other firmsbecause they areAВignore other firms' actions; strategically independentadvertise; unable to differentiate their products.CD27 In game theory, a strategyis useless, because firms are subject to bounded rationality.is useful in static games, but not in dynamic games.AВdefines the specific actions a firm will make.determines the payoff matrix of the game.D 28 A payoff matrixshows the payoffs (i.e. bribes) required to government officials for firmsundertaking specific actions.Adetails the actions each firm takes.shows the payoffs to each firm for each possible outcome.is optional in game theory.29 A player's best response isthe strategy that maximizes his payoff given what he thinks the otherplayer will do.a dominant strategy.AВimpossible to find when there isn't a Nash equilibrium.a way to avoid the prisoners' dilemma.D30 Strategic advertising in the cola marketsignificantly expands the size of the market.brings in few new customers and primarily shifts market share amongAВrivals.shifts market demand to the right, increasing quantity sold and decreasingprices.has no impact on the market.CDB.

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21 The situation in which one firm can produce the total output of the marl at lower cost than several firms is called natural monopoly. pure monopoly. ruling monopoly. cost monopoly. 22 Each member of a cartel agrees to reduce output lower than it would if it were acting independer is operating illegally in every country in which it is doing business. sets output independently of the impact on other members. makes less money than it otherwise would. 23 If a cartel is unable to monitor its members and punish those firms that violate their agreement, then the member firms will each act as price setters. the cartel will prosper in the long run. the market will become a monopoly. the cartel will fail.

21 The situation in which one firm can produce the total output of the marl at lower cost than several firms is called natural monopoly. pure monopoly. ruling monopoly. cost monopoly. 22 Each member of a cartel agrees to reduce output lower than it would if it were acting independer is operating illegally in every country in which it is doing business. sets output independently of the impact on other members. makes less money than it otherwise would. 23 If a cartel is unable to monitor its members and punish those firms that violate their agreement, then the member firms will each act as price setters. the cartel will prosper in the long run. the market will become a monopoly. the cartel will fail.

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 table below shows quantity, total revenue, marginal revenue, total cost, and marginal cost for an unregulated natural monopoly firm. Calculate the price that corresponds to the profit-maximizing quantity of goods. Round your answer to two decimal places if necessary. Quantity Total Revenue Marginal Revenue Total Cost Marginal Cost 11 $105.00$⁢105.00 $105.00$⁢105.00 $100.00$⁢100.00 22 $189.00$⁢189.00 $84.00$⁢84.00 $162.00$⁢162.00 $62.00$⁢62.00 33 $247.50$⁢247.50 $58.50$⁢58.50 $220.50$⁢220.50 $58.50$⁢58.50 44 $282.00$⁢282.00 $34.50$⁢34.50 $265.00$⁢265.00 $44.50$⁢44.50 55 $300.50$⁢300.50 $18.50$⁢18.50 $305.00$⁢305.00 $40.00$⁢40.00 66 $300.00$⁢300.00 −$0.50−$⁢0.50 $339.00$⁢339.00 $34.00$⁢34.00
What had Alcoa done that made the judge find it guilty of being a monopoly? a. Alcoa had used predatory pricing to keep new firms out of its marketb. Alcoa had engaged in price fixingc. Alcoa had never tried to monopolize the aluminum market, but its policy of building capacity to meet future demand had the effect of giving it a large market share that made it a de facto monopolyd. Alcoa had used tying contracts to drive rivals out of the markete. Alcoa had used price discrimination to acquire a monopoly Following its near bankruptcy in 1922, General Motors pioneered the decentralized management structure in which the firm was reorganized into semi-independent profit centers. Vice-presidents were appointed to manage these profit centers and were told that their bonuses would depend on the profitability of their division. This reorganization was designed to a. reduce management costsb. better capture economies of scalec. create a ratchet effect that would drive managers to perform…
There is an unregulated firm with a natural monopoly. The table below shows quantity of goods to be produced, price, total revenue, total cost, marginal revenue, marginal cost, and average cost. Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Average Cost 11 $18.00$⁢18.00 $18.00$⁢18.00 $18.00$⁢18.00 $17.00$⁢17.00 $17.00$⁢17.00 22 $17.00$⁢17.00 $34.00$⁢34.00 $16.00$⁢16.00 $33.00$⁢33.00 $16.00$⁢16.00 $16.50$⁢16.50 33 $15.00$⁢15.00 $45.00$⁢45.00 $11.00$⁢11.00 $45.00$⁢45.00 $12.00$⁢12.00 $15.00$⁢15.00 44 $12.00$⁢12.00 $48.00$⁢48.00 $3.00$⁢3.00 $55.00$⁢55.00 $10.00$⁢10.00 $13.75$⁢13.75 55 $10.00$⁢10.00 $50.00$⁢50.00 $2.00$⁢2.00 $63.00$⁢63.00 $8.00$⁢8.00 $12.60$⁢12.60 66 $8.00$⁢8.00 $48.00$⁢48.00 −$2.00−$⁢2.00 $70.20$⁢70.20 $7.20$⁢7.20 $11.70$⁢11.70 77 $6.50$⁢6.50 $45.50$⁢45.50 −$2.50−$⁢2.50 $77.00$⁢77.00 $6.80$⁢6.80 $11.00$⁢11.00 88 $5.00$⁢5.00 $40.00$⁢40.00 −$5.50−$⁢5.50 $84.80$⁢84.80 $7.80$⁢7.80 $10.60$⁢10.60 Determine how many goods the…
Suppose that Jana's Financial Consulting Company is a perfectly price discriminating monopolist with the following cost and revenue information: 0 1 2 Quantity Total Cost Marginal Cost Price Total Revenue Marginal Revenue $100 $170 $140 $160 $184 $150 $230 $140 $280 $130 $335 $120 $395 $110 $475 $100 $575 $95 min 00 6 7
4. Imagine a market with demand P = 420 – Q in each period. Two firms are thinking about colluding. They each have cost C(Qi) = 60Qi. If they cooperate and behave as a monopoly, then they have a marginal revenue curve, MRm = 420 – 2Q, and a marginal cost curve, MCm = 60. If they are in a cartel, then the firms will split the monopoly production and profits. If they compete, then they face MRi = 420 – 2Qi – Q-I and MCi = 60. a. If the firms stick to their agreement (cooperate), how much per-period profit do they each make? b. If they are not able to maintain their agreement (compete), what is their per-period profit? c. If one firm cheats on their agreement (deviate), how much does each firm make? Be sure to specify both the profit for the cheater and the firm cheated-on. d. Suppose the firms assume that their interaction will last forever (r = 1) and they share the common discount value R. What is the lowest value of R such that both firms are willing to continue with the cartel…
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ft : 00:09:48 Resale price maintenance can prevent showrooming. True False In a successive monopoly structure, if distributor has a constant marginal cost of $5 and is paying the producer $12 per unit, which is the profit-maximizing wholesale price, what is the distributor's marginal revenue at this output level? $17 $12 $7 $5
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11. In a particular industry the minimum value of long run average cost is reached when a firm produces 1,000 units of output per period. At this output rate, long run average cost is $ı per unit of output. The market demand curve for this product is as follows: Price Quantity $3.00 1,000 8,000 12,000 20,000 2.00 1.00 .50 Is this industry a natural monopoly? Why or why not?
Exhibit 9-4: A Monopoly Quantity Total Fixed Total Variable Price Demanded Cost Cost $100 0 $30 $0 90 1 $30 20 80 2 $30 48 70 3 $30 78 60 4 $30 110 50 5 $30 150 Refer to Exhibit 9-4. At an output level of 5 units, the monopolist earns a total profit of about ________. Group of answer choices $100.00 $70.00 $102.00 $82.00
Question 10 Monopolies -- Questions 10-15 refer to Figure 5-1 below. Figure 6-1: The diagram below depicts the market situation for a monopoly bread shop called Dough!. Price 24 22 20 MC 18 ATC 16 14 AVC 12 10 8. 6. MR 120 140 20 40 60 80 100 Quantity How many units will Dough! produce to maximize profits?