Because the demand curve for a monopolist is downward sloping: A) the monopolist is a price-taker. B) the monopolist has many possible price-output combinations from which to choose. the monopolist can sell as many units of its product at any price it wants. D) there is no limit on the monopolist's ability to make a profit.

Because the demand curve for a monopolist is downward sloping: A) the monopolist is a price-taker. B) the monopolist has many possible price-output combinations from which to choose. the monopolist can sell as many units of its product at any price it wants. D) there is no limit on the monopolist's ability to make a profit.

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

They live in America
Suppose that a monopolist can segregate his buyers into two different groups to which he can charge two different prices. In order to maximize profit, the monopolist should charge a higher price to the group that has:*the higher elasticity of demand.the lower elasticity of demand.richer members.none of the above The socially optimal price (P = MC) is socially optimal because*it reduces the monopolist’s profit.it yields a normal profit.it minimizes ATC.it achieves allocative efficiency. The main problem with imposing the socially optimal price (P = MC) on a monopoly is that the socially optimal price:may be so low that the regulated monopoly can’t break even.may cause the regulated monopoly to engage in price discrimination.may be higher than the monopoly price.none of the above
The monopolist faces the following demand curve: Price $20 Quantity 15 $19.50 16 $19 17 $18.50 18 $18 19 $17.50 20 $17 21 $16.50 22 $16 23 If the monopolist has total fixed costs of $40 and a constant marginal cost of $10, how much profit can the firm earn at the profit-maximizing level of output?
A monopolist faces a demand curve P = 100 – 4Q and initially faces total costTC = 12Q. (a) Calculate the profit-maximizing monopoly quantity and price, and compute the monopolist's total revenue and profits at the optimal price. (b) Suppose that the monopolist's total increases to TC = 44Q. Verify that the monopolist's total revenue goes down. c) Suppose that all firms in a perfectly competitive equilibrium had a combined total cost T C = 12Q. Find the long-run perfectly competitive industry price and quantity. Also what are the combined industry profits and revenue. (Hint: the supply curve is just the marginal cost) (d) Suppose that all firms' total costs increased to T C = 44Q. Verify that the increase in marginal cost causes total industry revenue to go up.
Suppose a profit-maximizing monopolist has total cost and marginal cost as follow TC = 8Q + 10 and MC = 8. It faces the demand curve P = 20-1/5Q. a) What is the equilibrium price and output?b) What is the total profit?c) Calculate the consumer surplus, producer surplus, and deadweight loss if the firm acts as a monopolist. Illustrate your answer with a diagram
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.
A monopolist has a single customer with the demand curve P=20-Q. (So this customer will buy different quantities at different prices.) Suppose the monopolist’s marginal cost is MC=0. (And assume FC=0 to keep things simple.) a) The monopolist uses “standard” pricing, i.e., it sets a single price for all units that the customer buys. The graph below shows the demand curve and MC curve. Solve graphically for the price & quantity that will maximize profit for the monopolist. Shade the areas on your graph that represent consumer surplus and the monopolist’s profit. Having observed the success of the monopolist in part (a), you’re plotting to enter the market and tempt the single customer to switch to you. Assume the following: You also have FC=0 and MC=0. You and the monopolist produce identical products, so if you do attract away the single customer, they come to you with the same demand curve as above, i.e., P=20-Q IMPORTANT: The monopolist has committed to their price from part (a),…
A movie theatre (a local monopolist) caters to students and other adults. The demand function for students is Qd = 2,700 – 150 P and the demand function for other adults is Qd = 2,500 – 50 P . Marginal cost is 2 per ticket. Assume that the monopolist can discriminate. What price willthe monopolist set for students? Pg = $ What price will the monopolist set for other adults? PA = 8 Section Attempt 1 of 1 Verify
2. A monopolist faces a representative consumer who acts as a price taker and has the demand function as Q(Q) = 200 – 2P. Suppose the monopolist bears the total cost C(Q) = 100 + 20Q + when producing Q units. a. Find the producer surplus of the monopoly if it exercises perfectly price discrimination. b. Find the producer surplus of the monopoly under the optimal two-block pricing. c. If the monopoly sells with two-part tariff T = A + pQ to the consumer, find its optimal A and p.
In the following situation, what should the monopolist do to maximize profit? Select the best answer. A monopolist is currently producing a level of output such that marginal revenue is $143 and marginal cost is $109. The monopolist then sets a price based on demand for the current level of output. Answer 2 Points Keyboard Shortcuts The monopolist should decrease output and decrease price. The monopolist should increase output and increase price. The monopolist should incs The monopolist should decrease output and increase price.
Suppose that the monopolist can produce with total cost: TC = 10Q. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q₁ = 120-4P₁ and Q₂ = 240 - 2P₂. Suppose that consumers can mail the product from cheaper location to a more expensive location at a mailing cost $50. What would be the monopolist profit? $5450 $6050 O $6450 $5050
The diagram below shows a monopolist's marginal cost schedule and the demand curve. Find and depict the following items within the diagram and briefly explain how you found them: Price Monopoly Price Demand Marginal Revenue Total Surplus Quantity Maximising Quantity b) Draw a possible marginal cost curve for the monopolist into the diagram that is consistent with all the other curves that are already given. c) Based on the marginal cost curve that you constructed in part (b), find and highlight the monopolist's total costs at the monopoly price in the diagram. d) Briefly explain the shape of the marginal revenue curve as compared to the demand curve in the diagram.