If the monopoly firm's marginal cost curve is either horizontal or upward sloping, it follows that its marginal revenue curve will cut its marginal cost curve at a_ level of output than where its demand curve cuts its marginal cost curve. It also follows that if the firm were to produce the quantity of output consistent with where its demand curve cut its marginal cost curve, the firm would be O a. higher, productive efficient b. lower, resource-allocative efficient c. lower, minimizing costs 90 lower gaming profits

If the monopoly firm's marginal cost curve is either horizontal or upward sloping, it follows that its marginal revenue curve will cut its marginal cost curve at a_ level of output than where its demand curve cuts its marginal cost curve. It also follows that if the firm were to produce the quantity of output consistent with where its demand curve cut its marginal cost curve, the firm would be O a. higher, productive efficient b. lower, resource-allocative efficient c. lower, minimizing costs 90 lower gaming profits

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For the monopoly shown above, which of the following best describes its practices? Price, Costs MC ATC D P3. P2. P1 MR Q2 Q1 Demand Quantity OA Operating with profit of area AP1ED OB. Operating at a loss of area ABEC C. Shutting down OD, Breaking even, with a deadweight loss to society of area DCE DE. Operating with profit area ADEP1 and deadweight loss to society of area DCE
Assuming that the price is greater than the average variable cost, a monopolist maximizes profits at the output for which (picture a graph): O price is equal to marginal revenue in the downward part of the marginal cost curve O marginal cost is equal to marginal revenue in the upward sloping part of the marginal cost curve O average variable cost and average total cost are in the downward part of their curves and price is equal to marginal cost O average total cost is at the lowest point
Explain why it is not possible for a monopoly firm to maximise its profits by charging a price in the price region where demand is inelastic, even though there are no direct substitutes for its product. Also explain how a monopoly will be able to charge a higher price than a firm producing the good under perfect, oligopolistic, or monopolistic competition
A natural monopoly exists when one firm can supply an entire market at a lower average total cost than can two or more firms, O a firm can engage in price discrimination. O a monopoly firm faces a horizontal demand curve. O the producers in an industry have formed a cartel. diseconomics of scale cxist in an industry.
Identify and discuss three ways in which a perfectly competitive market structure differsfrom a Monopoly.
If a monopolist with significant barriers to entry is making positive economic profit in the short run, what do we expect to happen as the market transitions to the long run? O The profit will increase since the monopolist has no competition, they can just raise the price to earn higher profits. O It will decrease as positive economic profit signals new firms to enter the market, increasing the market supply, and lowering the prevailing price. O It will increase, in the long run firms will drop out the market increasing the monopolists dominance in the marketplace. O The profit will stay the same, strong barriers to entry prevent new competition.
The inefficiency of the monopoly lies in the higher output that it sells and the lower price that it charges for its commodity. O True O False
While firms in perfect competition maximize profit by producing at a quantity where the marginal cost of producing another unit of a good is equal the the marginal revenue from producing another unit, monopoly firms will maximize profit by producing at a quantity where marginal cost of producing another unit is equal to the marginal revenue (the same as perfect competition) the marginal profit the average total cost O the price of the good 10:04 P Bi 63°F Cloudy 5/20/202 e here to search O
Figure: Monopoly Model Price, marginal revenue, marginal cost, average total cost MC O OPDJ. O OIHJ. O IPDH. O OSBJ. J KL N ATC MR Demand Quantity (per period When the firm is in equilibrium, its total cost is the area of rectangle: Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Demand curve that faces a monopolist: Select one: O a. Vertical O b. is identical to the marginal revenue curve O c. lies above the marginal revenue curve O d. Horizontal
PLEASE EXPLAIN FIRST
The monopoly supply curve is the O same as the competitive market supply curve. O portion of marginal costs curve where marginal costs exceed the minimum value of average variable costs. O result of market power and production costs. O none of the above