1. In long-run monopolistic competition,a) all firms will produce an identical productb) entry or exit will shift the demand curve until all firms earn zero profitc) firms might earn positive profits since strategic barriers prevent new firms from enteringd) entry or exit will shift the supply curve until all firms earn zero profite) firms may operate at a loss if the tax advantage are sufficiently large2. What is the profit maximizing output level for a monopolistic competitive firm facing demand of P=50-2q, constantmarginal costs of $10 and fixed costs are $50?a) 19 unitsb)10 unitsc) 30 unitsd) 25 unitse) 20 units3. What is the profit maximizing price for a monopolistically competitive firm facing demand of P=50-2q, constantmarginal costs of $10 and fixed costs of $50?a) $50b) $10c) $2d) $20e) $304. What is the maximum profit that can be earned by a monopolistically competitive firm facing demand of P=50-2q,constant marginal costs of $10 and fixed costs of $50?a) $150b) $100c) $500d) $200e) $3005. How much deadweight loss will be created by a monopolistically competitive firm facing demand of P-50-2q, contentmarginal costs of $10 and fixed costs of $50?a) $100b) $300c) $150d) $50e) $2006. Which of the following is NOT true regarding perfect competition and monopolistic competition?a) firms in each market structure operate in the long-run where LRAC and demand are tangentb) there are no barriers to entry or exit in either type of competitionc) all of the answers are trued) firms in each market structure operate at optimal scalee) firms in each market structure earn zero profits in the long-run7. Which characteristic of a monopolistically competitive market implies that firms will be unable to earn a profit in thelong-run?a) monopolistically competitive firms are able to earn a long-run profitb) there are no barriers to entryc) firms face a downward sloping demand curved) few sellers, many buyerse) output is differentiated8. In short-run monopolistic competition a firm maximizes its profit by selecting an output at whicha) marginal revenue exceeds marginal costb) marginal revenue equals marginal costc) total revenue equals total costd) marginal revenue equals average total coste) marginal revenue equals average variable cost9. Which of the following is NOT true of a firm operating in a monopolistically competitive market in the long-run?a) the firm produces less than optimal scaleb) the demand curve facing the firm is tangent to the marginal cost curvec) the firm sets a price above the minimum average costd) the firm operates with excess capacitye) all of the answers are true

A market structure known as monopolistic competition incorporates aspects of both monopolies and…

a) all firms will produce an identical product b) entry or exit will shift the demand curve until all firms earn zero profit c) firms might earn positive profits since strategic barriers prevent new firms from ente d) entry or exit will shift the supply curve until all firms earn zero profit e) firms may operate at a loss if the tax advantage are sufficiently large 2. What is the profit maximizing output level for a monopolistic competitive firm faci marginal costs of $10 and fixed costs are $50? a) 19 units b)10 units c) 30 units d) 25 units

a) all firms will produce an identical product b) entry or exit will shift the demand curve until all firms earn zero profit c) firms might earn positive profits since strategic barriers prevent new firms from ente d) entry or exit will shift the supply curve until all firms earn zero profit e) firms may operate at a loss if the tax advantage are sufficiently large 2. What is the profit maximizing output level for a monopolistic competitive firm faci marginal costs of $10 and fixed costs are $50? a) 19 units b)10 units c) 30 units d) 25 units

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Monopolists, like firms in other market structure, strive to maximize profit. Microsoft when it first came out with its Windows operating system was thought to be a monopolist. Assume that Microsoft is a monopolist and calculates that at its present output level, marginal cost is $3.50 and marginal revenue is $2.75. Microsoft could increase profits by -leaving both quatity and price unchanged. - decreasing price and increasing output. -leaving both quatity and price unchanged. -decreasing price and leaving output unchanged. -decreasing output and leaving price unchanged
A monopolist can produce at constant average and marginal costs of AC = MC = 5. The firm faces a market demand curve given by Q = 53 - P. The monopolist’s marginal revenue curve is given by MR = 53 – 2Q a. Calculate the profit-maximizing price-quantity combination for the monopolist. Also calculate the monopolist’s profits and consumer surplus. b. What output level would be produced by this industry under perfect competition (where price = marginal cost) ? c. Calculate the consumer surplus obtained by consumers in part b. Show that this exceeds the sum of the monopolist’s profits and consumer surplus received in part a. What is the value of the “deadweight loss” from monopolization?
The market demand curve for a pair of Cournot duopolists is given as P= 34 - 2Q, where Q =Qq+ Q2 The constant per unit marginal cost is 16 for each duopolist. Find the Cournot equilibrium price, total quantity, and total profits. (Round your answers to 1 decimal place (e.g., 32.1).) Equilibrium Price: 5:40 Quantity: d Profits: < Prev 10 of 10 Next 00:21 14/02/202. ere to search acer
Onestore has monopoly power in Smalltown. Assume that Onestore is a profit maximizing firm and currently operates at a negative economic profit in the short run.(a) Draw a correctly labelled diagram for Onestore and show each of the following:(i) The profit maximizing price and quantity labelled as Pm and Qm respectively (ii) Shade completely, the area representing the negative economic profit (b) Explain why Onestore continues to operate in the short run despite earning negative economic profit in the short run. c. A single price monopolist’s demand curve is given by:P = 240 – 3qand its total cost curve is given byTC = 30 + 6q Calculate the monopolist’s profit maximizing level of output Calculate the profit maximizing price for the monopolist What is the profit of the monopolist?
(a) Firms A and B are Cournot duopolists producing a homogeneous good. The inverse market demand is given by P= 100 Q, where P is the market price and Q is the total quantity demanded. Each firm has marginal cost equal to 40 and there are no fixed costs. Calculate the total industry output in this market. Derive also (i) the market price, the total profit of the two firms and the consumer surplus. (ii) monopoly. Calculate the total industry output after the merger. Derive also the market price, profit and consumer surplus after the merger. Explain intuitively any changes in these variables if the merger occurs. Suppose the two firms propose to merge to become a
Costs & Revenue INELASTIC MARKET ELASTIC MARKET COMBINED MARKET X2 X1 P2 P1 AR Y1 MC .. MC1 MC2 -MC ATC Y2 AR AR MR MR Output Q1 Q2 Capyright: www.economicsonline.co.uk MR a) Looking from the price perspective what kind of monopoly is presented cumulatively in all three diagrams? b) explain what are the diagrams are explaining? Support them with the example of your choice.
You are a monopolist facing the following demand schedule. You produce an output at a constant average and marginal cost of $12. Price Quantity $20 1 18 2 16 3 14 4 Calculate marginal revenue (MR) for each level of output. Find the profit-maximizing price and quantity. How much economic profit will you earn?
. Profit maximization and loss minimization BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. Suppose that BYOB charges $2.50 per can. Your friend Clancy says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. Complete the…
The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly a. Place point Pi at the profit maximizing price and quantitvy assuming that the monopolist can only charge a single price. 100 95 90 85 80 75 70 65 2 60 b. What are the profits of the firm if it charges a single price? 50 45 Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? 35 30 25 20 15 10 MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity
8. Suppose a multiproduct monopolist faces the following demand functions: P₁ = 55-Y₁-Y₂ P₂ = 70-Y₁-2y₂ Let the cost function be given by: C(Y₁Y₂) = y +Y₁Y₂ + y² Derive the profit maximizing prices and quantities. 2
Profit-maximization: Non-competitive Market A monopolist in the makeup industry produces two makeup products F and G for which the demand functions, respectively, are:1. Find the profit-maximizing quantity of output for each product.2. Find the profit-maximizing price for each product.3. What is the maximum profit that the firm could earn?
Unique Creations holds a monopoly position in the production and sale of magnometers. The cost function facing Unique is estimated to be TC $100,000 + 20Q What is the marginal cost (MC) for Unique? $ If the price elasticity of demand for Unique is currently -1.5, what price should Unique charge?S What is the marginal revenue (MR) at the price computed? $ If a competitor develops a substitute for the magnometer and the price elasticity increases to -2.25, what price should Unique charge? S