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Economics For Today

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter9: Monopoly

Section: Chapter Questions

Problem 7SQP

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Question

Suppose a monopolist faces the demand curve and cost curves
shown on the right.
If the monopolist is practicing perfect price discrimination and is
maximizing its profits, the total revenue is represented by the area
OA. OP ₂bQ₂
OB. OP 5bQ₂
OC. OP ₂aQ
OD. OP,dQ,.
O E. OP₂CQ
10
P5
aaaa
P4
P3
Dollars
P₂
P₁
Por
CA
MC/
'b
de
ATC
QjQ₁ Q₂ Qz
Quantity
Demand
NI
MR
Q4 Q5 11
OU

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Suppose a monopolist faces the demand curve and cost curves shown below. ATC Demand MR Quantity FIGURE 10 - 4 Refer to Figure 10 – 4. If this single - price monopolist is producing at the profit - maximizing level of output, the total profit is represented by the area O A. OP aQo O B. PabP2- O C. OP,fQ0- O D. P3ceP2 O E. OP,bQo
O OO The above graph shows the market demand function for a product. Assume that the market is served by a perfectly-price-discriminating monopolist with a constant marginal cost of production equal to $4 (MC = $4) and no fixed cost (FC = 0). The deadweight loss equals: DWL - $72 DWL - $0 DWL- -$48 DWL - $84 DWL-$36 $30 $28 $26 $24 $22 $20 Question 23 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
P A B C QUIZ i E Multiple Choice OA. O O Refer to the graph for a monopolist in short-run equilibrium. The monopolist will charge a price equal to the distance: Multiple Choice OA. OB. AVC MR OC. MC VIVIK Saved 0 Q Q Refer to the graph for a monopolist in short-run equilibrium. The monopolist will charge a price equal to the distance: ATC D not labeled on the graph. Help Save & Exit Subr
The diagram shows the equilibrium of a profit-maximising monopolist. Cost/revenue (£) Which area represents the supernormal profits made by the monopolist? OABQ MC ABDH AC ABFG B JCFG Al АВСЈ G AR MR Quantity (Q) O o o O O
Price οι οιοιο $20 $18 $16 $14 $12 $10 $8 O $8. $0 MC 0 300 600 700 800 Quantity per day Refer to the graph shown. Assuming that this monopolist maximizes profit, the marginal cost of its last unit of output will be: O $16. O $10. $12. AC D
Consider a monopolist who charges a single price to all of its customers. If this monopolist starts price discriminating, its output will and its profit will Orise; fall O fall; fall Ofall; rise Orise; rise
Answer the question by referring to the table below. The table shows the demand curve facing a monopolistwho produces at constant marginal cost of 6. In short-run equilibrium, the monopolist will produceQuantity Price10 1020 930 840 750 660 5a) 20 unitsb) 30 unitsc) 40 unitsd) 50 units
es The following table contains demand and cost data for a monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total profit will the monopolist receive at the profit-maximizing level of output? Quantity Price Total revenue Marginal revenue Total cost Marginal cost O $34 $ 1 32 30 28 26 24 22 20 18 16 14 234 5678 9 10 $ $20 36 46 50 54 56 64 80 100 128 160 $
AC. MO MC The figure above shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. Guantty After maximizing profits, what does the firm's revenue equal? O A. the area of rectangle ABGH O B. the area of rectangle BDEG O C. the area of rectangle BCFG O D. the area of rectangle ADEH
Consider the relationship between monopoly pricingand price elasticity of demand.a. Explain \\•hy a monopolist will never produce aquantity a t which the demand curve is inelastic.(Hint: If demand is inelastic and the firm raisesits price, what happens to total revenue and totalcosts?)b. Draw a diagram for a monopolist,. preciselylabeling the portion of the demand curve thatis inelastic. (Hint: The answer is related to themarginal-revenue curve.)c. On your diagram, show the quantity and pricethat maximize total revenue.
Refer to the graph shown of a profit-maximizing monopolist: $100 $90 MC $80 $70 $60 $50 Price, cost, revenue D 7000 14000 21000 12000 Question: What is the monopolist's economic profit(loss) at the profit-maximizing level of output? O-$280,000 O $0 $140,000 $840,000 O -$140,000 0 /AC MR
28 $55 $50 $45 MC АТС I of $40 $35 $30 $25 $20 Demand = P $15 $10 $5 $0 MR 40 80 120 160 200 240 Output (Q) The diagram above shows the Demand, MR, and cost curves for a monopolist in the short-run. At the profit maximizing Output (Q) level, the monopolist will earn a Total Profit of: Sel one: а. $1,200 b. $2,200 c. $800 d. $2,000 $$

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