A single-price monopolist is only one seller in the market by definition. This means that the monopolist sets the price and the quantity in order to maximize its profit, regardless of the elasticity of the demand. True False

A single-price monopolist is only one seller in the market by definition. This means that the monopolist sets the price and the quantity in order to maximize its profit, regardless of the elasticity of the demand. True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If a profit-maximizing monopolist is currently charging a price on the inelastic portion of its demand curve, what action should it take to maximize profits? It should reduce both output and price. It should raise the price and decrease output. It should raise the price and hold output constant. It should lower the price and increase output.
A monopolist will maximize profits by: Group of answer choices setting his price at the level that will maximize per-unit profit, while a perfectlycompetitive firm will minimize per-unit loss. producing the output where marginal revenue equals marginal cost, just as a perfectlycompetitive firm will. producing the output where price equals marginal cost, while a perfectly competitive firmwill produce where marginal revenue equals marginal cost. setting his price as high as possible, while a perfectly competitive firm will take price fromthe market.
A monopolist has four distinct groups of customers: group A has an elasticity of demand of 0.2, group B has an elasticity of demand of 0.8, group C has an elasticity of demand of 1.0, and group D has an elasticity of demand of 2.0. The group paying the highest price for the product will be group: a) D. b) C. c) B. d) A.
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
A monopolist has decreasing average costs as output increases. If the monopolist sets price equal to average cost, it will produce too little output from the standpoint of efficiency. maximize its profits. lose money. produce too much output from the standpoint of efficiency.
Consider a monopolist operating on a market with a downward sloping demand curve. The monopolist has a constant marginal cost and no fixed cost. At the current level of production and at the current price level, the price elasticity of demand is equal to -0.8. Assume the monopolist wishes to maximise profits. Would we be able to say anything about whether the monopolist has chosen a price and quantity that maximise profits? Explain your answer by means of diagrams (maximum 150 words) 2. What is the price elasticity of supply in this market?
What is meant by the term “market power”? Can a monopolist charge any price it wants because it is the only seller? What is the profit maximizing /loss minimizing rule a firm should follow regardless of the market structure within which the firm is operating? If the monopolist is incurring a short run economic loss, what are some options the monopolist has?
This is part 1 of a multi-part question. A monopolist faces the demand curve Q = 144 / P2, where Q is the quantity demanded and P is price. Its average variable cost is AVC = Q1/2 and its fixed cost is 25. 1. Find the monopolist's profit-maximizing quantity. (Round to at least 2 decimal places.)2. Find the monopolist's profit-maximizing price
A monopolist has the following fixed and variable costs:
Which of the following statements is true? A monopolist faces an upward sloping demand curve. A perfectly competitive firm can increase the price of its product without losing its business. A perfectly competitive firm faces an upward sloping demand curve. A monopolist can increase the price of its product and not lose all of its business.
A Monopolist has the following demand, marginal revenue, and marginal cost: p = 100 – 5q mr = 100 – 25q mc = 25 How much higher will the monopoly price be than the perfectly competitive price?
Suppose a profit-maximizing monopolist faces a downward-sloping linear demand curve. If its marginal cost of production increases, the elasticity of demand at the last quantity produced will become more negative. Group of answer choices True False