The figure to the right illustrates market demand for a monopoly along with its average total cost (ATC) curve.Is the monopoly a natural monopoly?The firmO A. is a natural monopoly because its demand curve is downward sloping.O B. is a natural monopoly because it has the potential to earn economic profits.OC. is not a natural monopoly because its demand curve is not infinitely elastic.O D. is not a natural monopoly because it experiences diseconomies of scale.OEE. is a natural monopoly because it can supply the entire market at lower average total cost than can two or morefirms.Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for onefirm compared to two firms?One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response asan integer.)Price and cost (dollars per unit)10.00-9.00-8.00-7.00-6.00-5.00-4.00-3.00-2.00-1.00-0.00-0246ATCDemand8 10 12 14 16 18 20 22 24QuantityQ✔

Monopoly is the kind of market where there is only one seller. The seller is therefore the price…

Is the monopoly a natural monopoly? The firm A. is a natural monopoly because its demand curve is downward sloping. B. is a natural monopoly because it has the potential to earn economic profits. C. is not a natural monopoly because its demand curve is not infinitely elastic. D. is not a natural monopoly because it experiences diseconomies of scale. E. is a natural monopoly because it can supply the entire market at lower average total cost than can two or more firms. Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for one firm compared to two firms? One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response as an integer.) Price and cost (dollars per unit) 10.00 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 4 6 8 ATC Demand 10 12 14 16 18 20 22 24

Is the monopoly a natural monopoly? The firm A. is a natural monopoly because its demand curve is downward sloping. B. is a natural monopoly because it has the potential to earn economic profits. C. is not a natural monopoly because its demand curve is not infinitely elastic. D. is not a natural monopoly because it experiences diseconomies of scale. E. is a natural monopoly because it can supply the entire market at lower average total cost than can two or more firms. Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for one firm compared to two firms? One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response as an integer.) Price and cost (dollars per unit) 10.00 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 4 6 8 ATC Demand 10 12 14 16 18 20 22 24

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Draw the graph. If the monopoly is a doing perfect price discrimination, then: 1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.
What is the difference between a monopoly's marginal revenue curve and a perfect competitor's marginal revenue curve? Please explain the difference in these markets by drawing the graphs.
Provide an example of a product or service that operates as a monopoly. Explain your answer. What barrier to entry helped create this monopoly?
The figure below shows demand, marginal revenue, and short-run cost curves for a monopoly: a. How much should the firm produce? What price should it charge? b. What is the firm’s profit (loss)? Should this firm produce or shut down? Explain. c. If the firm shuts down in the short run, how much will it lose?
Is a monopoly always bad for society? Question 6 options: None of the other answers is correct Yes. Monopoly is always bad Monopoly is not bad if its owner gives back to society in charity No. For example, patents on medications create monopolies, and increase the price and reduce the quantity sold, but without them, no one would take the high costs of developing new drugs and the quantity will be... zero!
How does the monopoly quantity (assuming no price discrimination) compare to the competitive quantity? Assume normally shaped demand (decreasing, not completely elastic or inelastic ) a.The monopoly quantity is higher b.The monopoly quantity is lower c.There is not enough information provided to be sure. d.The monopoly quantity is the same. Which one?
Which of the following statements about monopolies are correct? There is more than one correct answer to this question. You must mark all of the correct answers to receive full credit for this question. OAt the profit maximizing output for a monopoly, P< MR. OMonopolies are always illegal in the U.S. O If a firm enjoys decreasing returns to scale, this may help it to become a monopoly. In a pure monopoly, the firm is the industry. O A patent can help a firm to become a monopoly.
12. You’ve been hired as a consultant by a monopoly. You discover that the demand curve facing the monopoly is given by P = 80-Q and MC = 3Q. The firm is currently charging a price of $60. Using this information and a carefully drawn and labeled diagram and assuming that the firm should remain open, explain what the firm should do and why.
How do I figure out the second part?
Natural monopoly is inefficient as it charges a price higher than marginal cost. Is it feasible for the government to regulate the monopoly by setting a price equal to marginal cost? Explain with a diagram.
Provide an example of a cost function for which a natural monopoly exists. Why might we want to allow natural monopolies to exist (e.g. how might social welfare benefit from such a monopoly)?
How does monopoly compare with pure competition in terms of price, output, and efficiency? Explain.