Suppose, in the question above, this drug has a patent, which will provide a significant barrier toentry. If this monopolist is producing at its profit maximizing output and as long as the patent isactive, what should happen to the monopolist profits in the long run?Hint: Notice the question says "as long as the patent is active", it is even in bold. I often get answersabout what happens after the patent expires. That is not what this question is asking.Edit View Insert Format Tools Table12pt vParagraphBIUΑνT²VР...0 words </>

Monopoly is a market condition where there is a single seller. It sells a unique commodity in the…

Suppose, in the question above, this drug has a patent, which will provide a significant barrier to entry. If this monopolist is producing at its profit maximizing output and as long as the patent is active, what should happen to the monopolist profits in the long run?

Suppose, in the question above, this drug has a patent, which will provide a significant barrier to entry. If this monopolist is producing at its profit maximizing output and as long as the patent is active, what should happen to the monopolist profits in the long run?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

See similar textbooks

Related questions

Q: The diagram above represents a monopolist firm. Answer the following questions: What price will this…

A: When one provider offers a specific commodity or service to several customers, a monopoly is…

Q: There is a monopolist in a market for a particular type of consumer goods. It is costly to create…

A: Monopolist market means when there are few firms in the market competing against each other for…

Q: In this question, you will discuss the general case of positive externalities in a monopolist’s…

A: An externality is the effect of market inefficiency on the third party who is not included in the…

Q: Suppose that a monopolistic seller of designer handbags faces the following inverse demand curve: P=…

A: A monopolist produces the output where MR=MC.

Q: Fruity Apples is the monopolist in the market for apples. The following equations describe the…

A: A perfectly competitive firm produces at P = MC in the short run. We have following information: P…

Q: Only one firm produces and sells San Francisco Giants baseball hats in the country of NoDodgers, and…

A: There is a monopoly firm that produces baseball hats. Following are the monopolist's demand,…

Q: if a product moves from being monopolistic to a monopoly will the demand for the industry decrease?…

A: Monopolistic competition is a market structure with a large number of firms and buyers. The firms…

Q: 1, Does a monopolist have a supply curve? Explain your answer.

A: “Since it is a multiple question, we will solve the first question. If you want any specific…

Q: Consider that a monopolist produces camouflage backpacks, has fixed costs of 2000 and marginal cost…

A: A monopoly will maximise profit at a point where marginal revenue is equal to marginal cost and…

Q: Suppose you operate in a monopoly environment and you set your price in order to achieve maximum…

A: A firm maximizes its profit by setting the quantity that is derived from the intersection of the…

Q: Sara is a single-price, profit-maximizing monopolist who sells her own patented perfume (shown in…

A: A monopoly firm will produce at the intersection of MR and MC curves to maximize the profit. A…

Q: Monopolistic competition creates inefficiency because of the Price markups and excess capacity. The…

A: Monopolistic competition is an imperfect market condition which is characterized by the presence of…

Q: Which of the following statements about price-takers is false? We do not analyze them using diagrams…

A: An individual or business that must accept market prices because it lacks the market share to do so…

Q: Select one or two examples of an industry characterized by monopoly and discuss how each example…

A: A monopoly is a market structure characterized by the existence of a single firm as the producing…

Q: why do perfectly competitive firms maximize their profits by producing so that the price is equal to…

A: In the field of microeconomics, there exist four kinds of market structure and these market…

Q: In a monopolistically competitive market, the government applies a specific tax of $1 per unit of…

A: Monopolistic market: It is a market structure where there exist a large number of buyers and a large…

Q: product may be provided by a monopolist, but the market may be contestable. How can it be that a…

A: A market refers to a physical or virtual place where buyers and sellers interact to exchange goods,…

Q: Only one firm produces and sells soccer balls in the country of Wiknam, and as the story begins,…

A: a) The monopolist maximizes profit, profit is maximized at the point where MR-MC and then…

Q: Consider a monopolistic business. What sort of demand curve does a monopolist face in contrast to a…

A: A monopolist company is the only one in the market selling a good that has no direct competitors. As…

Q: What do economists mean when they say that competitive markets are more efficient than monopolistic…

A: A competitive market, also known as a perfectly competitive market, is a type of market structure…

Q: e table below shows a monopolist’s demand curve and cost information for the production of its good.…

A: The optimal quantity produced by a monopolist depends on the total revenue and the total cost. The…

Q: Which type of a firm, monopolistically competitive or a monopoly, will have a greater incentive to…

A: A monopolistically competitive market comprises of many sellers supplying similar but differentiated…

Q: A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What type(s)…

A: Perfectly competitive firm is a price taker and monopolist is a price maker.

Q: What is meant by the term “market power”? Can a monopolist charge any price it wants because it is…

A: "Since you have asked multiple questions ,we will solve first question for you.If you want…

Q: Which of the following statements are true about this natural monopoly? Check all that apply. In…

A: A monopoly firm produces at the intersection of MR and MC curves. When ATC keeps decreasing as…

Q: Only one firm produces and sells soccer balls in the country of Wiknam, and as the story begins,…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Referring to the diagram, the monopolist will charge a price of ______ and sell quantity of _______

A: A monopoly is a market form in which a single seller sells unique products, and the firms’ products…

Q: Only one firm produces and sells soccer balls in the country of Wiknam, and as the story begins,…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: The following graph shows the demand, marginal revenue, and marginal cost curves for a single-price…

A: We are going to compare the profit maximizing conditions in presence of monopoly and perfect…

Q: for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much it…

A: here we calculate the profit maximizing , Quantity and Price by using the given information which…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive film?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
ques6
1 Imagine an incumbent monopolist is currently earning a profit of $100 million. Suddenly, theincumbent faces an entry threat and is considering whether or not to limit price. If the incumbent allows theentrant to come into the market it will see its profit decline to $50 million. In the case of effectively impededentry, the profit earned by the incumbent if it decides to limit price will be:A. greater than $100 million.B. greater than $50 million but less than $100 million.C. less than $50 million.D. either B or C.
Consider the relationship between monopoly pricing and price elasticity of demand.a. Explain why a monopolist will never produce a quantity at which the demand curve isinelastic. (Hint: If demand is inelastic and the firm raises its price, what happens to totalrevenue and total costs?)b. Draw a diagram for a monopolist, precisely labeling the portion of the demand curve thatis inelastic. (Hint: The answer is related to the marginal- revenue curve.)c. On your diagram, show the quantity and price that maximize total revenue.
part 9 10 11 9. How doesthe price and output of a monopolist differ from thatofthe perfectly competitive A:industry? i.10. Whatportion of the consumer surplusin the competitive situation wastransferredto the firm inthe monopoly situation?11. How does a monopoly affect consumersurplus? Is this good or bad?
How many units of Rogaine will the firm decide to sell?Why?What price will the monopolist charge for each unit? How much profit does he make in total? Include a graph in your answer (it does not need to be to scale, but should be clearly labeled). Needed info in picture below
please answer both the questions
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.
Give type answer
Which of the following statements about monopolies are correct? There is more than one correct answer to this question. You must mark all of the correct answers to receive full credit for this question. OAt the profit maximizing output for a monopoly, P< MR. OMonopolies are always illegal in the U.S. O If a firm enjoys decreasing returns to scale, this may help it to become a monopoly. In a pure monopoly, the firm is the industry. O A patent can help a firm to become a monopoly.