Answer in step by step with explanation.Don't use Ai and chatgpt. Suppose the figure represents the market fordiamond necklaces, where the company that suppliesnecklaces is a monopoly because it is the only firm with accessto diamond mines.260.00-240.00-220.00MCWhat is the firm's profit-maximizing price and quantity? Whatare profits?200.00-180.00-1.) Use the point drawing tool to indicate the profit-maximizingprice and quantity for the monopoly. Label thispoint 'Profit-maximizing'.2.) Use the rectangle drawing tool to shade in economic profits.Label this shaded area 'Profit'.Carefully follow the instructions above, and only draw therequired objects.--160.00-140.00-120.00-Price and cost (per necklace)100.00-80.00-60.00-ATC40.00-20.00-MRD0.00+0246 8 10 12 14 16 18 20 22 24 26Quantity (diamond necklaces)

1)Indicate the Profit-Maximizing PointLocate the profit-maximizing quantity:This is where the…

Answered: Suppose the figure represents the…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.3P

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Similar questions

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?
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
If a monopoly firm is earning profits, how much would you expect these profits to be diminished by entry in the long run?
How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive film?
From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify. Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology requited having a wile matting to every home, it seemed plausible that telephone service had diminishing average costs and might require regulation like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has occurred over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
Draw the demand curve, marginal revenue, and marginal cost curves from Figure 9.6, and identify the quantity of output the monopoly wishes to supply and the price it will charge. Suppose demand for the monopolys product increases dramatically. Draw the new demand me. What happens to the marginal revenue as a result of the increase in demand? What happens to the marginal cost curve? Identify the new profit-maximizing quantity and price. Does the answer make sense to you? Figure 9.6 Illustrating Profits at the HealthPill Monolpoly
If public utilities are a natural monopoly, what would be the danger in deregulating them?
How is the perceived demand curve for a monopolistically competitive film different from the perceived demand curve for a monopoly or a perfectly competitive film?
What is a natural monopoly?
What is predatory pricing? How might it reduce competition, and why might it be difficult to tell when it should be illegal?
How does the demand curve perceived by a monopolist compare with the market demand curve?

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