Price and co (dollars per hamburger)5.004.304.003303.002.502.001.30MCX1.000.50MRD01020304050Quantity (hamburgers per hour)Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo, Oklahoma. The above figure represents the demand, marginal revenue, and marginal cost curves for this establishment. Whatquantity will the Busy Bee produce per hour in order to maximize its profit?OA. 20OB. 10O C. 50OD.30

- If the marginal cost is smaller than the marginal revenue, then it is profitable for the firm to…

Answered: Price and co (dollars per hamburger)…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 6 Economies of scale are achieved by producing larger quantities Oproducing smaller quantities producing in a country with a larger economy. Obecoming a monopoly
A perfectly competitive firm charges a price that is O lower; more O lower; less O higher; more O higher; less and produces than a monopolist.
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Economics Explain why a monopoly producer of shoes will not vertically integrate with perfect competitive distributors, and why a monopoly producer will vertically integrate with a monopoly distributor. Draw the appropriate graphs to explain these cases.
Perfect Competition and Monopoly Problems 1. Suppose the typical firm in a perfectly competitive industry has the following long-run total cost function: TC = 240Q – 6Q2 + 0.08Q*| What is the long-run price for product Q? 2. Stanley Smith has a soft drink concession monopoly at Fort Tippecanoe, Indiana, County Fair. He believes his total cost for supplying the drinks will be TC = 800 + 0.2Q + 0.0001Q? If the County Fair Board tells him he must charge $0.80 and demand for the drinks during the fair is given by the demand curve Q = 5000 – 2500P determine the following: (a) The number of drinks sold and Stanley's total profit at the fixed price of $0.80 per drink. (b) Stanley's profit-maximizing output, price, and profit if he were allowed to set his own price instead of having to charge $0.80.
Figure 24.1 below relates to the short-run monopoly equilibrium. Use the figure to answer the question below. The total profit of the monopoly is equal toa) R28 000.b) R46 000.c) R18 000.d) R25 000.
You have been granted a monopoly in the avocado market. The market demand for avocados is Q = 2000 – 2P. Your cost structure is such that your total costs are TC = 1000+ 400Q. (limit: whatever needed) What is your profit maximizing price and quantity? Explain this in words and show it graphically. What are the profit, producer surplus and consumer surplus? The government is thinking about breaking your monopoly into ten identical firms and giving ownership to 10 random people. Correspondingly, each firm would have a fixed cost of $1000 and a marginal production cost of $400 per unit. In this perfectly competitive environment, what would be the equilibrium price and quantity? Explain this in words and show it graphically. What are the profit per firm, producer surplus and consumer surplus that correspond to your answer to part d)? How much would you be willing to pay to keep the government from taking your monopoly away? Explain.
Which of the following are characteristics of a monopoly market? (Check all that apply.) In the short run, positive economic profit possible P > MC at the profit maximizing quantity In the long run, positive economic profit possible In the short run, only zero economic profit possible V Significant barriers to entry In the long run, firms operate at the minimum of the ATC curve MR = MC at the profit maximizing quantity UEasy entry/exit OP = MC at the profit maximizing quantity In the long run, only zero economic profit possible
Suppose that only one firm, Big Foot, sells footballs in the country and international trade of footballs including both exporting and importing is prohibited by government due to Big Foot’s successful lobby. The following equations indicates Big Foot’s market demand and total cost:• Demand: P = 5-0.5Q• Total Cost: TC = 1.5 + 0.5Q + 0.25 Q2where Q is quantity (in 1000) and P is the price measured in dollars. (i) Determine how many footballs Big Foot chooses to produce, the price it will set for its product and its expected profit. Illustrate your analysis with a propermarket diagram.(ii) Evaluate the size of deadweight loss cause by monopoly status of Big Foot. Suppose that the parliament passed a new law that not only allows everyone to sell footballs but also opens international trade of footballs. Suppose further that the market demand in the country remains the same while the price of football in the competitive global market is $3 including shipping and importation fee. Analyse…
Use the cost and revenue data to answer the questions. Quantity Price Total Revenue Total Cost 10 90 15 80 20 70 25 60 30 50 35 40 900 1200 1400 1500 1500 1400 675 825 1025 1250 1500 1850 What is marginal revenue when quantity is 25? What is marginal cost when quantity is 15? If this firm is a monopoly, at what quantity will profit be maximized? If this is a perfectly competitive market, which quantity will be produced? $ 20 $ 90 Incorrect quantity: 6 Incorrect quantity: 8 Incorrect
You have been granted a monopoly in the avocado market. The market demand for avocados is Q = 2000 – 2P. Your cost structure is such that your total costs are TC = 1000+ 400Q. (limit: whatever needed) What is your profit maximizing price and quantity? Explain this in words and show it graphically. What are the profit, producer surplus and consumer surplus? The government is thinking about breaking your monopoly into ten identical firms and giving ownership to 10 random people. Correspondingly, each firm would have a fixed cost of $1000 and a marginal production cost of $400 per unit. In this perfectly competitive environment, what would be the equilibrium price and quantity? Explain this in words and show it graphically. What are the profit per firm, producer surplus and consumer surplus that correspond to your answer to part d)? How much would you be willing to pay to keep the government from taking your monopoly away? Explain.
Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.

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