8. In a market with a monopoly that faces direct demand Q(P c(Q) = dQ- eQ² then the firm's marginal revenue function is a. c. a-2bQ d. none of the above 9. The figure to the right shows the market with a negative externality. The competitive equilibrium quantity is a. A b. B c. C d. D 10. The figure to the right shows the market with a negative externality. The monopoly equilibrium quantity is. a. A b. B MR bP, and cost function AB C D MC₂ P(Q) MC,

8. In a market with a monopoly that faces direct demand Q(P c(Q) = dQ- eQ² then the firm's marginal revenue function is a. c. a-2bQ d. none of the above 9. The figure to the right shows the market with a negative externality. The competitive equilibrium quantity is a. A b. B c. C d. D 10. The figure to the right shows the market with a negative externality. The monopoly equilibrium quantity is. a. A b. B MR bP, and cost function AB C D MC₂ P(Q) MC,

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...

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Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
How does the demand curve perceived by a monopolist compare with the market demand curve?
Problem 3 Consider a country called Midwest and is run by a monopolist. Market demand is P = 35 – 4xQp and the monopolist's cost curve is MC = 7 + Qs. a) What is the slope of the monopolist's marginal revenue curve? а. -3 b. -1 c. -6 d. 0 e. -8 b) What is the monopolist's revenue in equilibrium in autarky? c) Compute consumer surplus in the autarkic equilibrium. For d)-h), suppose export supply is perfectly elastic at PW= 10 d) Compute the monopolist's revenue in the free trade equilibrium. e) Compute the increase in consumer surplus by opening up to free trade. f) Compute the quantity imported in free trade. g) Suppose a tariff of 2 is placed on imports. Compute the new quantity imported. h) Consider an import quota equal to your answer in (g). Which statement is most likely: a. Consumer surplus will be higher with the quota than with the tariff b. Consumer surplus will be lower with the quota than with the tariff c. Consumer surplus will be the same with the quota and with the tariff
Show that a monopoly will not necessarily lower its price by the same percentage as its constant marginal cost drops: 1.) Use the point drawing tool to indicate the initial equilibrium price and quantity. Label this point 'E'. 2.) Use the line drawing tool to show a 50 percent decrease in marginal cost. Label this line 'MC₁'. 3.) Use the point drawing tool to indicate the new equilibrium price and quantity. Label this point 'E,'. Carefully follow the instructions above, and only draw the required objects. What is the percentage change in the price given a 50 percent decrease in marginal cost? The price decreased by percent. (round your answer to two decimal places) 50- 45- 40 35- 30- 25- 20-1 15- 10- 5 Price, P 10 20 30 -MC MR D 40 50 60 70 80 90 100 Quantity, Q
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1. Sid is the CEO of a local power plant operating in monopoly market structure. a. Explain why the demand curve (P) here is larger than the MR, and why Sid won’t produce on the inelastic portion of demand curve. b. Draw a graph comparing Sid’s market structure with a market in perfect competition (on the same graph). Be sure to label the components of deadweight loss. c. On a separate graph, show the case where the monopoly is making a positive profit and label the profit area.
1. Assume an industry with demand Q=100-p where there is a monopolist with constant marginal cost equal to $20. Suppose that many perfectly competitive firms could produce in this industry at a marginal cost equal to $16. Calculate prices and quantities under competition. Then, calculate total economic surplus. Calculate prices and quantities under monopoly. Then, calculate the social cost of monopoly. Compute consumer surplus under competition when marginal cost of the competitive firms equal to $20.
A6.
As the only producer in the apple market, at what price, how many apples would Alex sell per week in order to maximize his economic profit? Calculate his producer surplus.
QUESTION 3 You are considering subscribing to ESPN+. You are willing to pay up to $83 per year for a subscription. The current annual price is $26. Calculate your consumer surplus under these circumstances. QUESTION 4 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 0 45 90 135 180 225 270 315 360 405 450 495 540 585 630 675 Quantity P -MR---MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC(Q)= AC(Q) for all Q. Calculate the monopoly's profits if the monopoly charges the single profit maximizing price O 18,550 O 19,440 O 19,100 O 14,500
1. 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. 2. Which of the following statements are true about this natural monopoly? Check all that apply. The gas company is experiencing economies of scale. 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 diseconomies of scale. In order for a monopoly to exist in this case, the government must have intervened and created it.
Homework Unanswered A monopoly is producing where marginal cost is $10,000 and marginal revenue is $15,000 in an industry where demand is above the average cost. Place the following actions in order to describe the steps the monopoly would take to maximize its profits. Drag and drop options into correct order and submit. For keyboard navigation... SHOW MORE III = E The firm realizes that as it increase production, total revenue will go up by more than cost increases. III = ||| The quantity produced will be larger than at the beginning and the price will be lower. = The monopoly will produce more units up to the point where marginal cost equals marginal revenue. The monopoly will make positive economic profits at the new price and quantity. As they increase quantity price is determined by the demand curve. There will be a surplus if the price is too high. Unanswered Submit