S LO20# 3PRICE (Dollars per hot dog)5.History Bookmarks People TabWindow Help令) 71%Mind Tap - Cengage Learning/index.html?deploymentld%359828119415547787292595253&elSBN=9780357133606&id%3D1069413986&snapshotid%-D2211990&* CENGAGE MINDTAPQ Search this courseHomework (Ch 15)5. Monopoly outcome versus competition outcomeConsider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in thecity, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power.The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs.%3DPlace the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition.Competitive Market+.4.5PC Outcome3.53.02.5S=MC1.50.5D.120140160 18009QUANTITY (Hot dogs)40PIMacBook AirDADDF8F6F5F4F2%246.7.8.9-4.2. %24# 3aase20PRICE (Dollars per hot dog)History Bookmarks People TabWindow Help4)) 71%Mind Tap - Cengage Learningo/index.html?deploymentld%3D59828119415547787292595253&elSBN=9780357133606&id%3D1069413986&snapshotid%=2211990&CENGAGE MINDTAPQ Search this courHomework (Ch 15)Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. Thisfirm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that thenew monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph showsthe demand (D), marginal revenue (MR), and marginal cost (MC) curves for the monopoly firm.Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity of a monopolist.Monopoly5.04.5Monopoly OutcomeO3.5Deadweight Loss3.02.52.0MC1.51.00.5MRD.+18020012014009QUANTITY (Hot dogs)IT)8.MacBook AirDDF7F5F4F2F3)%2308.6.6.L4.5.

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ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Question

S LO
20
# 3
PRICE (Dollars per hot dog)
5.
History Bookmarks People Tab
Window Help
令) 71%
Mind Tap - Cengage Learning
/index.html?deploymentld%359828119415547787292595253&elSBN=9780357133606&id%3D1069413986&snapshotid%-D2211990&
* CENGAGE MINDTAP
Q Search this course
Homework (Ch 15)
5. Monopoly outcome versus competition outcome
Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium with many hot dog stands in the
city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power.
The following graph shows the demand (D) and supply (S = MC) curves in the market for hot dogs.
%3D
Place the black point (plus symbol) on the graph to indicate the market price and quantity that will result from competition.
Competitive Market
+.
4.5
PC Outcome
3.5
3.0
2.5
S=MC
1.5
0.5
D.
120
140
160 180
09
QUANTITY (Hot dogs)
40
PI
MacBook Air
DA
DD
F8
F6
F5
F4
F2
%24
6.
7.
8.
9-
4.
2.

%24
# 3
aase
20
PRICE (Dollars per hot dog)
History Bookmarks People Tab
Window Help
4)) 71%
Mind Tap - Cengage Learning
o/index.html?deploymentld%3D59828119415547787292595253&elSBN=9780357133606&id%3D1069413986&snapshotid%=2211990&
CENGAGE MINDTAP
Q Search this cour
Homework (Ch 15)
Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This
firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the
new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows
the demand (D), marginal revenue (MR), and marginal cost (MC) curves for the monopoly firm.
Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity of a monopolist.
Monopoly
5.0
4.5
Monopoly Outcome
O
3.5
Deadweight Loss
3.0
2.5
2.0
MC
1.5
1.0
0.5
MR
D.
+
180
200
120
140
09
QUANTITY (Hot dogs)
IT)
8.
MacBook Air
DD
F7
F5
F4
F2
F3
)
%23
08.
6.
6.
L
4.
5.

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4REQUIREMENT : PRESENT THE GRAPH BY YOUR OWN WORDS
After analyzing the demand for his products, Ahmed realized that the demand for his products is inelastic. This means that, O a. the demand for his products are sensitive to price changes O b. it is not advisable to increase his price O c. the demand for his products are weak O d. it is fine to increase his price