In the long run, if firms were making positive economic profits, then other firms will market, which results in a in the price and economic profits become equilibrium. enter, decrease, smaller but exact amount unknown O enter, increase, unknown enter, decrease, zero O Do nothing due to barriers to entry, no impact, no impact in the the

In the long run, if firms were making positive economic profits, then other firms will market, which results in a in the price and economic profits become equilibrium. enter, decrease, smaller but exact amount unknown O enter, increase, unknown enter, decrease, zero O Do nothing due to barriers to entry, no impact, no impact in the the

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

TI,c market for apple pies in the city of F.ctenia is competitive and has the following demand schedule; a. Compute each producer's total cost and averagetotal cost for l to 6 pies.b. The price of a pie is now SIL How many pies aresold? How many pies docs each producer make?How many producers are there? How much profitdocs each producer earn? c. ls the situation d escribed in part (bl a long-runequilibrium? Why or why not?d. Suppose tha t in the Jong run there is free entryand exit. How much profit does each producerearn in the Jong-run equilibrium? Wha t is themarket price? How many pies docs each producermake? How many p ies are sold in the market?How many pie producers arc operating?
Femi's Hook NLadder is the only company selling fire engines in the fictional country of Alexandrina. Femi initially produced eight trucks, but then decided to increase production to nine trucks. The following graph gives the demand curve faced by Femi's HookNLadder. As the graph shows, in order to sell the additional fire truck, Femi must lower the price from $80,000 to $40,000 per truck. Notice that Femi gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial eight engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial eight engines by selling at $40,000 rather than $80,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $40,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 BO 60 40 20 1 2 6 6 7 QUANTITY (Fire…
I am a Solar panel company, that manufactures and distributes solar panels in the US market. Two years ago it had 5 competitors but the government stimulus in the industry has encouraged 7 new US competitors ti ebter the market. In these circumstances, my solar panel company's price for its output ......
6 If it was possible for one company to gain ownership control of all uranium processing plants in the United States, then what would be the likely result? The factors of market demand and supply would set the price. BO The company would strive to reach efficiencies only they know how to achieve. CO The company would set up barriers to entry to discourage competition. DO The government would initiate deregulation to ensure the company's monopoly.
What tells you the profit a company makes on each item it sells? ROA EPS ROS O ROE
A publisher faces the following demand schedule for the next novel from one of itspopular authors:Price Quantity Demanded$ 100 0 novels90 100,00080 200,00070 300,00060 400,00050 500,00040 600,00030 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishingthe book is a constant $10 per book.a. Compute total revenue, total cost, and profit at each quantity. What quantity woulda profit-maximizing publisher choose? What price would it charge?b. Compute marginal revenue. (Recall that MR = ΔTR/ΔQ.) How does marginal revenuecompare to the price? Explain.C. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantitydo the marginal-revenue and marginal-cost curves cross? What does this signify?d. In your graph, shade in the deadweight loss. Explain in words what this means e. If the author were paid $3 million instead of $2 million to write the book, how wouldthis affect the publisher’s decision regarding what…
If a company with market pewer is not making enongh profit (in equilibrinm), a. the price will drop, thus increasing total revenue because demand is elastic. b. price will increase thins increasing total income because demand is inelastic. c. it will exit the industry in the long run if the economic benefit is negative. d. it will expand sales until they reach the unit elastic point on demand. Market power a. it is the ability to increase the price without losing all sales. b. it exists whenever the firm faces a downward sloping demand curve. c. the greater the less elastic is the demand. d. the smaller, the more positive is the cross elasticity of demand. e All of the 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.
Many small boats are made of fiberglass and a resinderived from crude oil. Suppose that the price of oilrises.a. Using diagrams, show what happens to the costcurves of an individual boat-making firm and tothe market supply curve.b. What happens to the profits of boat makers in theshort run? What happens to the number of boatmakers in the long run?
Q:1 Describe the market structure and Calculate short run output, Price and profit Warner by Green Bull. Q:2 What could be the potential Long-run Price output equlibrium for Green Bull? Clearet State the conditipns and charastericts of such an equlibrium Q:3 Calculate the range which a Long-run equlibrium Price/output would ve found for Green Bull. Is there opportunity for economic profits in the Long run?
Henry Potter owns the only wcU in town that pro-ducesclean drinking water. He faces the follO\\•ingdemand, marginal revenue, and marginal cost curves:Demand: P • 70 - QMarginal Revenue: MR • 70 - 2Q~arginal Cost: MC • lO + Qa. Graph these three curves. Assuming thatMr. Potter maximizes profit, what quantity docshe produce? What prioc does he charge? Showthese rcsuiiS on your graph.b. Mayor George Bailey, concerned about water con~sumcrs_. is considering a price ceiling that is10 percent below the monopoly price derived inpart (a). What quantity would be demanded atthis new price? Would the profit-maximizingMr. Potter produce that amount? Explain. (Hi11t:1hink about marginal cost.)c. George's Uncle Billy says that a price ceiling is abad idea because price ceilings cause shortages.Is he right in this case? What size shortage wouldthe prioc ociling create? Explain.d. George's friend Clarence, who is even more con~cerncd about consumers, suggests a price ceiling50 percent below the…
A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $30 per book.d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economicefficiency. What price would it charge for the book? How much profit would it make at thisprice? (