Hot Air Balloon Rides is a single-price monopoly.Columns 1 and 2 of the table set out the market demandschedule and columns 2 and 3 set out the total costschedule.Calculate Hot Air's profit-maximizing output and price.Calculate the economic profit.Hot Air's profit-maximizing number of rides is 3 a monthand the profit-maximizing price is $160 a ride.>>> Answer to 1 decimal place.CPrice(dollarsper ride)220200180160140120Quantity(ridesper month)ܘ ܝ ܚ ܚ ܟ ܗ2345Total cost(dollars permonth)80160280440640880

Answered: Hot Air Balloon Rides is a single-price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Hot Air Balloon Rides is a single-price monopoly.
Columns 1 and 2 of the table set out the market demand
schedule and columns 2 and 3 set out the total cost
schedule.
Calculate Hot Air's profit-maximizing output and price.
Calculate the economic profit.
Hot Air's profit-maximizing number of rides is 3 a month
and the profit-maximizing price is $160 a ride.
>>> Answer to 1 decimal place.
C
Price
(dollars
per ride)
220
200
180
160
140
120
Quantity
(rides
per month)
ܘ ܝ ܚ ܚ ܟ ܗ
2
3
4
5
Total cost
(dollars per
month)
80
160
280
440
640
880

Expert Solution

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A single-price monopoly is a type of market structure where a single seller or a group of sellers have complete control over the supply of a particular product or service, and they charge the same price to all customers.

In a single-price monopoly, the monopolist has the ability to set the price of the product at a level that maximizes their profits, which is often higher than the price that would prevail in a competitive market. This is because the monopolist has the power to restrict output and charge a higher price.

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