monopoly firm MC 44 40 36 ATC 32 28 AVC 24 a. 20 ei 16 d- 12 8. 4. MR Q 4 8. 12 16 20 24 28 3: 33. Which point represents the output level that maximizes society's wellbeing? a %24 O O O O
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- da 6 A market is characterised by an inverse demand curve p = 8 - 2O where Q is total quantity. Two firms, A and B, are competing à la Cournot and ta non TCA(qA) = 29A and TCB(qB) = 9 %3D %3D data Total profits n (Le. the sum of profit for the two firms) are equal to: ggio max. ontrassegna O (a) N = nda O (b) = 16 O (c)N = 4 O (d) = 9Exhibit 10-4 $/0 MC ATC 24 /t 10 The non-discriminating monopolist in Exhibit 10-4 should: O Produce 10 units at a price of $36 per unit. O Produce 10 units at a price of $24 per unit. O Produce 10 units at a price of $40 per unit. O Produce 15 units at a price of $32 per unit. O We cannot determine what the firm should do without knowing its average variable cost.The following graph shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost. Price and cost (dollars) 50 40 30 20 10 0 50 Multiple Choice O 100 150 What price should the firm charge in each market? P₁ = $20, P₂ = $32.50 P₁ = $35. P₂- $22.50 = P₁ = $20, P2 = $20 200 P₁ = $27.50, P₂ = $35 MR2 250 Quantity MC 300 D₁ L 350 Impossible to say because market demand is not given. MRT 400 450 D₂ 500 Q
- W ECON 2100 Compatibility Mode Home Insert Draw Design Layout References Mailings Review View Share O Comments 2. Line D represents the market demand curve for polo shirts; if the polo shirt market is perfectly competitive and MC represents the market supply curve. But if the shirts are produced by a single monopoly firm, MR represents the marginal revenue curve for a monopolist producer of polo shirts and MC represents the marginal cost curve for that monopolist. 48 44 40 36 32 MC 28 20 16 12 8 4 MR 4 12 16 20 24 28 32 36 40 44 48 Quantity of Polo shirts a. If the polo shirts are supplied by a perfectly competitive industry, what will be the output and price? (Please explain your answer.) b. If the polo shirts are supplied by a monopoly, what will be the output and price that the monopoly would choose? (Please explain your answer.) c. Please show on the graph the dead weight loss associated with monopoly price/quantity outcome? Page 2 of 4 639 words English (United States) Focus +…P $9 $7 55 B 300 rounds 740 rounds. 900 rounds MC ATC 1.200 rounds MRWD DWD $10 $9 0 100 200 350 Q 0 100 120 200 Q The graphs represent the demand for use of a local golf course for which there is no significant competition. It has a local monopoly.) P denotes the price of a round of goif and Q is the quantity of rounds sold each day. If the left graph represents the demand during weekdays and the right graph the weekend demand then over the course of a full seven-day week, this price discriminating profit-maximizing golf course should sel a total of $4 MRWE MC ATC PwePRICE (Dollars per gigabyte of data) 20 18 16 14 0 0 2 MR 5 QUANTITY (Gigabytes of data) 6 O True False 8 ATC MC 9 10 D + Which of the following statements are true about this natural monopoly? Check all that apply. Monopoly Outcome It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The 5G LTE company is experiencing diseconomies of scale. The 5G LTE company is experiencing economies of scale. In order for a monopoly to exist in this case, the government must have intervened and created it. True or False: Without government regulation, natural monopolies never earn zero profit in the long run.
- 5. Suppose a company has a monopoly on a game called Monopoly and faces a demand curve given by QT = 100-P and a marginal revenue function given by MR = 100 - 2QT where QT equals the combined total number of games produced per hour in the company's two factories (QT = 91 + 92). If factory 1 has a marginal cost function given by MC₁ = q1-5 and factory 2 has a marginal cost function given by MC2 = 0.5q25, how much total output will the company choose to produce and how will it distribute this production between its two factories in order to maximize profits?Question 11 A firm's market demand for a monopolist is given by P= 120-2Q. His marginal cost of production is 2Q. What level of output would maximize profits? O 0 120 20 30You produce WORD and EXCEL. You have two customers, A and B. Willingness to pay for each item for each person appears below. A B WORD 8 14 EXCEL 23 14 In parts (a)-(c) below, suppose marginal cost is zero for both WORD and EXCEL. a) If you sell EXCEL and WORD separately, what price for each maximizes your profit? What is your total profit? b) If you bundle EXCEL and WORD together, what bundle price maximizes your profit? What is your profit? c) What is the optimal mixed bundling strategy? Is there an advantage to mixed bundling in this example? Why or why not? d) Now suppose your MC has increased from zero to 10 for each unit of EXCEL and each unit of WORD. Repeat parts (a)-(c) with this change in costs.
- ¹Consider a monopoly firm- firm 1 - which is choosing to invest in a new production facility. It has two choices: Facility Cost Capacity Small, S $12 2 units at zero marginal cost Large, L $30 10 units at zero marginal cost Both choices put a capacity constraint on the amount that the firm can produce. The firm is less capacity constrained if it builds a larger facility; however, a larger facility also imposes a greater cost. The demand curve for firm 1 is: P = 12 - Q₁ A. Suppose the monopoly firm does not face any threat of entry. Will the firm invest in a small or a large facility?Market Power and Monopoly - End of Chapter Problem Green Machine is the only greenhouse in isolated Point Barrow, Alaska, and therefore has a monopoly on the sale of fresh flowers. The manager estimates that the elasticity of demand for flowers is -0.5. Green Machine cannot be maximizing profits because O it is operating in the inelastic portion of its demand curve, so it can increase price and still gain more revenue while lowering cost. This will increase profits. according to the Lerner index an elasticity of demand of -0.5 means Green Machine's markup is 50% higher than what it should be, so it needs to decrease price and increase sales. elasticity of demand is negative; therefore, Green Machine's total costs are higher than its total revenue, and profits are not being maximized. O its marginal revenue must be greater than its marginal cost when elasticity of demand is between 0 and -1, so profits are not being maximized and it must expand production to increase sales and lower…Given the attached diagram, and assuming it is a monopoly market structure with the monopolist trying to maximize profit by using MRMC rule. What will be the relationship between Price (P) and Marginal Cost (MC) when the monopolist produces the optimal profit maximizing price and quantity combination? Price, Cost (S) 2 22 99 30 25 18 12 a. P> MC b. P = MC O C.PSEE MORE QUESTIONS
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