Explanation it correctly Q)Contrast, from the point of view of customers, three advantages and disadvantages of perfect competition and monopoly.
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- Question 4 A monopoly can be recognized by certain characteristics that set it aside from the other market structures. Explain why a monopoly firm is a price-maker in i. microeconomics. The opponent of monopoly argued that the monopoly power will result to a social cost. Explain why. i. A perfectly competitive market has the opposite characteristics or conditions from the monopoly market, describe THREE (3) characteristics or conditions of the perfectly Competitive market structure. iii.5. The inverse demand eurve a pure monopoly faces is P= 120- 20. The firm's cost curve is TC = 10 + Q'. (a) Compare the monopoly outcome to that of perfect competition. (b) Determine how much consumers are hamed by monopoly relative to perfect competition (i.e. determine the change in consumer surplus). (c) Determine the deadweight loss of monopoly.2. Monopoly, Practice Question Firm P is a monopolist for a new drug that makes people feel thinner. the total cost function is C(Q) = 200 + 10Q + Q² The inverse demand function is p(Q) = 82 - Q (a) By how much do revenues increase if this firm sells one more (small) unit of output? By how much does its cost go up if it produces one more (small) unit of output? (b) What is the optimal price and quantity the monopolist should charge and sell? (c) What is the profit the monopolist makes? Should the firm shut down in the short or long run? (d) If the company increases its price by a small fraction (let us say 1%), by what proportion does demand go down? [Round to two decimal places.] (e) What percentage of the price is due to costs and what is due to markup? [Round to two decimal places.] (f) What is the deadweight loss of the monopoly pricing compared to competitive prices?
- (a) State the main features of monopoly and name any one organization which operates under monopoly. (b) Briefly explain the ‘monopolist’s equilibrium’ in short-run with the help of a schedule. (c) Determine the equilibrium of firm under monopolistic competition in long runi A monopoly can be identified by a few traits that distinguish it from other market systems. Identify the reasons a monopoly firm sets prices in microeconomics. ii. Monopolistic opponents said that the monopoly power would have a negative social impact. Tell us why. iii Describe THREE (3) qualities or conditions of the perfectly Competitive market structure. A perfectly competitive market has the opposite characteristics or conditions from a monopolistic market.(a) What is a monopoly, and why is it inefficient in relation to a competitive market?
- COURSE: MICROECONOMICS 2 - MONOPOLY IN DURABLE GOODSA monopolistic firm has estimated its inverse demand function as P = 200 − 0.5 Q + 40*(1/UL) with a increasing marginal cost (MC) estimated to be 10 Q. (a) Estimate effect on firm's extraordinary profit if it changes useful life (UL) of its product from 8 years to 5 years. b) What will happen to selling price?Problem 1. (Monopoly and Efficiency) A monopolist faces a market demand Q = 30- P, where P is the market price, and has a cost function TC = }Q², where Q is the quantity monopolist produces. (a) Find the profit maximizing price and quantity. Calculate the resulting consumer surplus (CS), producer surplus (PS) and the deadweight loss (DWL). (b) Suppose that the government puts a price ceiling at p 18. How much output will the monopolist produce? Calculate the resulting CS, PS, and DW L. Why is DWL different now? (c) Suppose that the government puts a price ceiling on the monopolist in order to maximize the total surplus (CS+ PS). What price ceiling should it choose? How much output will the monopolist produce at this price ceiling? Calculate resulting CS, PS, and DW L. Is this the socially optimal outcome?Assignment 9 Question 1 A monopolistic producer of two goods, G, and G2, has a joint total cost function TC = 5Q1 + Q1Q2 +5Q2 Where Q1 and Q2 denote the quantities of G1 and G2 respectively. If P, and P2 denote the corresponding prices then the demand equations are P1 = 40 – Q1 + Q2 Ра 3 20 + 2Q1- Q2 a) Find the total revenue function for each good b) Find the profit function for the firm c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either type d) Find the price that the firm is supposed to charge for each good. e) Estimate the new optimal profit if the production quota increases to 15 unit
- Question 2 (a) what is price discrimination.Give examples (b) Determine the conditions for price discrimination to be effective.(a) If you are the owner of the only bookstore in a small town, do you have a monopoly? Explain. (b) Draw graph and explain the inefficiency of a monopoly firm such as public sector provision of electricity.QUESTION 8 Kim is a cook that makes really unique egg rolls and she is the only person selling these egg rolls. Assume Kim's demand is linear and that she profit maximises. Select the item from the list provided to make the following statements true: Kim's egg roll business operates in a monopoly because 1. is less than 2. profit 3. there are close substitutes 4. is greater than 5. there is only one seller 6. dead weight loss 7. is equal to 8. she is a price taker 9. there are many sellers Kim is profit maximising implying that she is producing at where her marginal revenue her marginal cost of production. ✓ If Kim were to produce where her marginal cost intersects the demand curve for her egg rolls, she would be maximising 10. revenue 11. consumer surplus 12, is exactly twice of
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