2.5 The following diagram illustrates the demand curve facinga monopoly in an industry with no economies or disecono-mies of scale and no fixed costs. In the short and long run,ATC. Copy the diagram and indicate the following:MC%3D$bonsictthe UnitedMC = ATCOutput, Qa. Optimal outputb. Optimal pricec. Total revenued. Total coste. Total monopoly profitsf. Total "excess burden" or “welfare costs" of the monopoly(briefly explain)

Given: In short-run: MC=ATC Note: Due to multiple subparts being posted, the first three subparts…

Answered: a. Optimal output b. Optimal price c.…

Business

Economics

a. Optimal output b. Optimal price c. Total revenue

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 2WNG

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Question

2.5 The following diagram illustrates the demand curve facing
a monopoly in an industry with no economies or disecono-
mies of scale and no fixed costs. In the short and long run,
ATC. Copy the diagram and indicate the following:
MC
%3D
$
bonsict
the United
MC = ATC
Output, Q
a. Optimal output
b. Optimal price
c. Total revenue
d. Total cost
e. Total monopoly profits
f. Total "excess burden" or “welfare costs" of the monopoly
(briefly explain)

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