Review the graph at right for a monopoly market. Price 100- Assume the firm is charged a specific tax of t = $30 per unit. 90- Use the line drawing tool to draw the new marginal cost curve. Label it 'MC + t. MC 80- Carefully follow the instructions above, and only draw the required objects. 70- The new output level is (enter your response as a whole number). 60- 50- The new price is $ (enter your response as a whole number). 40- 30- 20- 10- MR 04 10 20 30 40 50 60 70 80 90 100 Quantity

Review the graph at right for a monopoly market. Price 100- Assume the firm is charged a specific tax of t = $30 per unit. 90- Use the line drawing tool to draw the new marginal cost curve. Label it 'MC + t. MC 80- Carefully follow the instructions above, and only draw the required objects. 70- The new output level is (enter your response as a whole number). 60- 50- The new price is $ (enter your response as a whole number). 40- 30- 20- 10- MR 04 10 20 30 40 50 60 70 80 90 100 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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When a per unit tax is placed on the sale of a product with a linear demand curve, the resulting price increase under monopoly will Be less than the tax in the long run and short run Be more than the tax in the long run and short run Will equal the tax increase in the long run O Will be less than the tax increase in the short run and equal to the tax increase in the long run
QUESTION 26 A pure monopolist is selling eight units at a price of $20. If the marginal revenue of the ninth unit is $2, then the firm's demand curve is perfectly elastic.. price of the ninth unit is greater than $20. price of the ninth unit is $18. price of the ninth unit is $19.
Which of the following statements is true of a monopoly as compared to a perfectly competitive market with the same costs? * Consumer surplus is smaller. Profit is smaller. Deadweight loss is smaller. Total surplus is larger. O Quantity is larger.
Suppose that the monopolist's demand is: P = 8 – Q, and marginal revenue is: MR = 8 – 2Q. - The marginal cost is: MC = 2, and there is no fixed cost. a.Find out the profit maximizing output level. b.Specify the amount of economic profit or loss at the profit maximizing output. c.Calculate the price elasticity of demand at the profit maximizing point and explain it.
Understand economies of scale. At what point are there economies of scale and at what point are there diseconomies of scale? What does this have to do with the monopolist? Long-Run ATC Unit Costs a Q₁ Q₂ Output Q₂
You are the owner of a monopoly firm. The demand curve that you face is: 100 0. 5Q - Your Total Cost and Marginal Cost are: 1035 +10Q +0. 5Q2 10 +Q TC |3| MC The government decides to regulate your firm and imposes the Efficient Price. What is the price you must set? Regulated Efficient price $77.5 Regulated Efficient price = $55 Regulated Efficient price = $60 Regulated Efficient Price = $70
Use the following information to determine the optimal decisions. Inverse Demand: P = 115 - 0.05Q MR = 115 - 0.1Q TC = 300 + 3Q + 0.2Q2 MC = 3 + 0.4Q Acting like a monopoly what profit would the Pendleton P.A.C make for each show?
B-club sells videocassette in two separable markets .the marginal cost of each cassette is $2. For the first market, demand is giv n by Q1=20-2.5p1 The demand equation for the second market is Q2=20-5p2 a)If the firm used third-degree price discrimination.what will be the profit maximizing price and?quantity in each market?how much economic profit maximizing will the firm earn? State different conditions required for price discrimination to occur effectively
Under monopoly, a firm: Question 18 options: A) is a price taker. B) maximizes profit by setting marginal cost equal to marginal revenue. C) will shut down in the short-run if price falls short of average total cost. D) always earns a pure economic profit. Both a perfectly competitive firm and a monopolist: Question 19 options: A) always earn an economic profit. B) maximize profit by setting marginal cost equal to marginal revenue. C) maximize profit by setting marginal cost equal to average total cost. D) are price takers. Which of the following is a market structure of monopoly? Question 15 options: A) Few firms operating as price takers. B) Single firm operating as a price taker. C) Single firm that is a price maker. D) All of the above are true.
Suppose demand is Q = 10000 - 1000P and marginal cost is constant at MC=6. From the given demand curve, one can compute the following marginal revenue curve: MR = 10 - Q/500 a. Graph the demand, marginal cost, and marginal revenue curves. b. Calculate the price and quantity associated with point C, the perfectly competitive outcome. Compute industry profit, consumer surplus, and social welfare.