Reference Figure 3. Assume that this is a monopolist. Assume price = P1 and output = Q2. Which of the following is true? Figure 3 Cost and Revenue($) P₂ P₁ Po 0,0₁ B O the firm should expland output O the firm should raise price O The firm should lower price O The firm is maximizing profit Quantity

Reference Figure 3. Assume that this is a monopolist. Assume price = P1 and output = Q2. Which of the following is true? Figure 3 Cost and Revenue($) P₂ P₁ Po 0,0₁ B O the firm should expland output O the firm should raise price O The firm should lower price O The firm is maximizing profit Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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
If the monopolist shown in the following figure could practice first-degree price discrimination, the consumer surplus would be: Price (dollars) 50 40 30 20 10 0 O $450.00 $900.00 $0.00 $225.00 O $1,200.00 30 50 60 MR 100 MC Quantity
If a monopolist with significant barriers to entry is making positive economic profit in the short run, what do we expect to happen as the market transitions to the long run? O The profit will increase since the monopolist has no competition, they can just raise the price to earn higher profits. O It will decrease as positive economic profit signals new firms to enter the market, increasing the market supply, and lowering the prevailing price. O It will increase, in the long run firms will drop out the market increasing the monopolists dominance in the marketplace. O The profit will stay the same, strong barriers to entry prevent new competition.
Cost & Figure 15 Revenue $10 per unit MC $9 $8 АТС $7 $6 $5 $4 $3 $2 $1 MR 2 3 4 7 8 10 Quantity (in thousands) Refer to the above Figure 15 which shows cost curves, a marginal revenue (MR) curve and a demand curve faced by a monopolist. If this monopolist is profit maximizing and does not price discriminate, it will produce ( Select ] v units of output and charge a price of [ Select ] per unit. Given its cost curves, we can tell that this monopolist is currently earning [ Select ] economic profit. According to the classical welfare economics, the socially efficient quantity to be produced in this market would be [ Select ] units of output and a socially efficient price would be [Select ] per unit.
QUESTION 23 If the monopolist shown in the following figure could practice first-degree price discrimination, the producer surplus would be: Price (dollars) 50 40 30 20 10 $0. $225. $450. $900. O $1,200. 30 50 60 MR 100 MC Quantity
Question 30 Demand: P=120-Q Marginal Revenue: MR=120-2Q Total Cost: TC=Q² Marginal Cost: MC=2Q For this monopolist, the profit-maximizing price is and the profit-maximizing quantity is 90, 30 30, 90 40, 80 None of these answers O O O
If a monopolist faces an inverse demand curve, p(y) = 100-2y and has constant marginal costs of $32 and zero fixed costs and if this monopolist is able to practice perfect price discrimination, its total profits will be O a. $1,156. O b. $17. O c. $578. O d. $1,734. O e. $289.
2) The Epson Company is a monopolist in the market and faces the demand curve shown in the figure below. The firm's marginal cost curve is MC= 100 +2Q. a. What is the firm's profit-maximizing output and price? Price ($/unit) 400 0 D 200 Quantity of printers (thousand) b. If the firm's demand changes to P = 300 - Q while its marginal cost curve remains the same, what is the firm's profit-maximizing level of output and price? How does this compare to your answer for (a)? c. Draw a diagram showing these two outcomes. Holding marginal cost equal, how does the shape of the demand curve affect the firm's ability to charge a high price? (bonus question 5 points)
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Exhibit 9-8 Profit maximizing for a monopolist Ps MC ATC P. Price, P3 costs, P2 and revenue P. (dollars) Ai MR Q, Quantity of output (units per time period) As shown in Exhibit 9-8, the monopolist's total cost is which of the following areas? O PIAEP5. O P2BDP4. O P3CDP5. O PĄDEP5. O None of these.
A monopolistic firm sells into two markets. The two inverse demand curves are p, = 12 – g, and p, = 12 – 2g3: Assume that the firm cannot charge different prices in the two markets. Then its total revenue will be О a.(24 - 3Q)Q O b.(24- 3P)P Ос. 48- 30 O d. (12 - P)3 2
Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Calculate Hot Air's profit-maximizing output and price. Calculate the economic profit. Hot Air's profit-maximizing number of rides is 3 a month and the profit-maximizing price is $160 a ride. >>> Answer to 1 decimal place. C Price (dollars per ride) 220 200 180 160 140 120 Quantity (rides per month) ܘ ܝ ܚ ܚ ܟ ܗ 2 3 4 5 Total cost (dollars per month) 80 160 280 440 640 880