Price (dollars per unit) 600 400 AC = MC De mand Marginal revenue 200 400 Computers (units per day) The graph above shows the average cost, marginal cost, demand, and marginal revenue curves for selling computers in a given market. The computer industry is currently perfectly competitive and in equilibrium. Suppose all firms in the industry are taken over by a single firm that establishes a monopoly in the market. Assuming the monopoly maximizes profit, Select one: there will be no effect on the price of computers. Ob. the price of computers will increase from $400 to $600, but there will be no change in quantity demanded. the price of computers will be set equal to the marginal cost of computers. O d the price of computers will increase from $400 to $600, and the quantity demanded will fall from 400 to 200 per day.

Price (dollars per unit) 600 400 AC = MC De mand Marginal revenue 200 400 Computers (units per day) The graph above shows the average cost, marginal cost, demand, and marginal revenue curves for selling computers in a given market. The computer industry is currently perfectly competitive and in equilibrium. Suppose all firms in the industry are taken over by a single firm that establishes a monopoly in the market. Assuming the monopoly maximizes profit, Select one: there will be no effect on the price of computers. Ob. the price of computers will increase from $400 to $600, but there will be no change in quantity demanded. the price of computers will be set equal to the marginal cost of computers. O d the price of computers will increase from $400 to $600, and the quantity demanded will fall from 400 to 200 per day.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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