Consider the following demand and cost information on a single-price monopoly firm in theshort run:Price per unit(in dollars)Quantity(in pounds)Marginal Cost(in dollars)1110169248.37415563474385The total fixed cost of the firm is equal to $10. The firm will make a profit/loss equal toand will produceLoss of $2; 2 units of outputProfit of $2; 6 units of outputLoss of $10; zero units of outputProfit of $5; 5 units of output

Profit maximizing quantity is where marginal revenue equals marginal cost.

Consider the following demand and cost information on a single-price monopoly firm in the short run: Price per unit (in dollars) Quantity (in pounds) Marginal Cost (in dollars) 11 10 1 6. 9 4 8 3 7 4 1 6. 5 6. 3 4 7 4 3 8 5 The total fixed cost of the firm is equal to $10. The firm will make a profit/loss equal to and will produce O Loss of $2; 2 units of output O Profit of $2; 6 units of output O Loss of $10; zero units of output O Profit of $5; 5 units of output

Consider the following demand and cost information on a single-price monopoly firm in the short run: Price per unit (in dollars) Quantity (in pounds) Marginal Cost (in dollars) 11 10 1 6. 9 4 8 3 7 4 1 6. 5 6. 3 4 7 4 3 8 5 The total fixed cost of the firm is equal to $10. The firm will make a profit/loss equal to and will produce O Loss of $2; 2 units of output O Profit of $2; 6 units of output O Loss of $10; zero units of output O Profit of $5; 5 units of output

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

None
Compared to a perfectly competitive industry, a single-price monopoly produces more output the same output O less output
3. Suppose the minimum efficient scale of an industry is at 100 units of output. At this point, average cost equals 50. Inverse demand for this industry is: P(Q) = A - Q a) What range of values should A take on in order for this industry to exhibit the structure of a natural monopoly? b) At what value of A the industry in part (b) stops being a natural monopoly?
Suppose the market for asparagus has the following (inverse) market demand schedule: p=88-0.2Q The industry has the following cost structure: MC = ATC = $4 The Amalgamated Asparagus Company is looking to spend factor resources in socially-wasteful legal battles and advertising campaigns to maintain a full monopoly in this market. Answer the following. a. For its monopoly, Amalgamated Asparagus is willing to pay resources worth up to $14070 Suppose that competitive rent-seeking pressures cause Amalgamated Asparagus to pay its maximum willingness-to-pay for monopoly rights. b. Social cost of this monopoly = $ 4410 Hint: Your answer to (a) should be whole number. Think about why.
3. MUSEUM MONOPOLY MATH Once the museum has incurred the basic operating cost of 60 to open for the day, the average variable cost (and marginal cost) of serving each visitor is only 2. In other words, the museum's total daily operating cost function is DOC[Q] = 60 + 2Q, where Q is the number of visitors. Meanwhile, the inverse demand function for museum admission is P[Q] = 34 - Q. TIP: We used "average daily operating cost" instead of average total cost when discussing museums. a) If this museum were a commercial, profit-maximizing enterprise, then find its profit. TIP: You'll need to find Q* and P*. Even though you could answer this with a well-drawn graph, show that you can "do the math” to find the correct answer. TIP: This may sound familiar. What did you learn about drawing this graph? ☺ b) Suppose the museum manager set the price at 28, which is not the profit-maximizing price. Find its profit. For the remainder of the problem, suppose that the museum is instead a nonprofit…
Question 2
A price-discriminating monopoly O is illegal cannot offer discounts sells a larger quantity than it would if it were a single-price monopoly
In the short run, each of the 5 firms in some industry faces a capacity constraint and constant marginal and average costs until this capacity is reached (see the table below). Marginal Cost = Average Cost Maximum output Firm 1 $50 100 Firm 2 $60 20 Firm 3 $67 50 Firm 4 $80 200 Firm 5 $92 70 Assuming that no firm has monopoly (pricing) power, what will be the quantity supplied at a price of (a) $40 (b) $55 (c) $73 (d) $99
QUESTION 2 Quantity 1 2 3 5 456 7 8 9 Price с с с с с с сл сл сл 5 5 5 5 5 5 5 5 The price and quantity relationship in the table is most likely that faced by a firm in a O monopoly. O concentrated market. O competitive market. O strategic market.