Name three characteristics of a monopoly Give an example of a business that is cons nopoly. How does a monopoly firm (or any busines quantity that should be produced to maxim ther words, what rule do they follow?
Name three characteristics of a monopoly Give an example of a business that is cons nopoly. How does a monopoly firm (or any busines quantity that should be produced to maxim ther words, what rule do they follow?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Name three characteristics of a monopoly firm.
2) Give an example of a business that is considered a
monopoly.
3) How does a monopoly firm (or any business) decide
the quantity that should be produced to maximize profit?
In other words, what rule do they follow?
4)
1)
Draw the monopoly cost curves where the firm is
making a profit. Shade in the area of profit.
5) If the monopoly firm is making a profit will other
firms join the market (like they did in perfect
competition) and eliminate the profits of the monopoly?
Why or why not?
6) Draw the monopoly curves where the firm is losing
money. Shade in the area of loss.
7) If a firm in any market structure is losing money
what will they do in the long-run?
8) How is the price and quantity that a monopoly
produces different than the price and quantity that is
produced in perfect competition?
9) Draw the cost curves of a monopoly where the
business would immediately (short-run) shut-down.
10) Draw the cost curves for a monopoly and show the
area of consumer surplus, producer surplus and
deadweight ls.
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