Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $5 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. In part e, round your answer to two decimal places. a. If this firm keeps increasing its output level, will ATC per bag ever increase? No Are there economies of scale at all levels of output? Yes b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? 24 per bag At that price, the size of the firm's loss would be $ million. Will the firm want to exit the industry?

Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $5 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. In part e, round your answer to two decimal places. a. If this firm keeps increasing its output level, will ATC per bag ever increase? No Are there economies of scale at all levels of output? Yes b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? 24 per bag At that price, the size of the firm's loss would be $ million. Will the firm want to exit the industry?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Sid is the CEO of a local power plant operating in monopoly market structure. Explain why the demand curve (P) here is larger than the MR, and why Sid won’t produce on the inelastic portion of demand curve. Draw a graph comparing Sid’s market structure with a market in perfect competition (on the same graph). Be sure to label the components of deadweight loss. On a separate graph, show the case where the monopoly is making a positive profit and label the profit area.
5. Suppose a company has a monopoly on a game called Monopoly and faces a demand curve given by QT = 100-P and a marginal revenue function given by MR = 100 - 2QT where QT equals the combined total number of games produced per hour in the company's two factories (QT = 91 + 92). If factory 1 has a marginal cost function given by MC₁ = q1-5 and factory 2 has a marginal cost function given by MC2 = 0.5q25, how much total output will the company choose to produce and how will it distribute this production between its two factories in order to maximize profits?
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Monsanto holds significant regional monopoly power-in some regions they are a true monopoly being the only seller of agriculture seeds. If the elasticities of demand, JEDI, for soybean seeds is 3.5, and 3 for corn, then the profit-maximizing price (relative to marginal cost) for soybeans is times marginal cost, and the price is times marginal cost for corn. Round to one decimal if needed. A Moving to another question will save this response. « >
Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $6 per bag no matter how many bags are produced. Instructions: Enter your answers as a whole number. In part e, round your answer to two decimal places. a. If this firm keeps increasing its output level, will ATC per bag ever increase? No = Are there economies of scale at all levels of output? No ÷ b. If you wished to regulate this monopoly by charging the socially optimal price, what price would you charge? $ per bag At that price, the size of the firm's profit would be $ million. Will the firm want to exit the industry? No c. You find out that if you set the price at $7 per bag, consumers will demand 10 million bags. At that price, the firm's profit or loss will be $ million. d. If consumers instead demanded 20 million bags at a price of $7, how big would the firm's profit or loss be? At that price, the size…
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