The accompanying figure shows the demand curve, marginal revenue curve, marginal cost eurve and average total cost curve for a monopolist. 30 28 26 24 22 20 18- 16 ATC 12 10 -MC 4 MR 2 3 6 9 10 Quantity (units/day! 1) This monopolist maximizes its profit by producing charging a price of 4 units per day and 18 per unit 2) The socially optimal level of output is 8 units per day. 3) At this monopolist s profit-maximizing level of output what is its economic profit or loss? The economie loss is $-72 at the profit maximizing level. 4) At his monopolist's socially optimal level of output, what is its economic profit or loss? The Economic loss is $-64 at the socially optimal level. 5) At this monopolist's profit-maximizing level of output what the deadweight loss to society! 14 of 118 words Focus 31 பொ/து *uu

The accompanying figure shows the demand curve, marginal revenue curve, marginal cost eurve and average total cost curve for a monopolist. 30 28 26 24 22 20 18- 16 ATC 12 10 -MC 4 MR 2 3 6 9 10 Quantity (units/day! 1) This monopolist maximizes its profit by producing charging a price of 4 units per day and 18 per unit 2) The socially optimal level of output is 8 units per day. 3) At this monopolist s profit-maximizing level of output what is its economic profit or loss? The economie loss is $-72 at the profit maximizing level. 4) At his monopolist's socially optimal level of output, what is its economic profit or loss? The Economic loss is $-64 at the socially optimal level. 5) At this monopolist's profit-maximizing level of output what the deadweight loss to society! 14 of 118 words Focus 31 பொ/து *uu

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. The following figure shows the marginal revenue [MR], demand, and average cost [AC] curves for a profit-maximizing monopolist. Price a. IFA b. FGH c. AFGB d. BGEO B O G 12 C MR H EJ AC Demand Quantity The loss in welfare in the market due to the monopoly firm is
To maximize its profit, a monopolist would choose which of the following outcomes? a. 100 units of output and a price of $20 per unit b. 100 units of output and a price of $40 per unit c. 150 units of output and a price of $30 per unit d. 200 units of output and a price of $40 per unit
3. When is it optimal for a monopolist to produce the same output as in a perfectly competitive market?
(Figure: Determining Monopolist Profit) Based on the graph, the profit earned by the monopolist is represented by the rectangle: MC ATC 3. MR Output O A. aceg. B. adeh. O C. abcd. O D.abfe. Price and Cost
3. Profit Maximization with Limited Information. Joe Holiday is a monopoly provider of Fishing Reels in a remote fishing village on a barrier island off the Gulf Coast. Currently he is selling is BassMaster reels for $50 each. Joe doesn't know the precise demand function for fishing reels, but he estimates price elasticity of demand to be -2. If the reels cost Joe $30 each, is he maximizing profits? If not, what would be the profit maximizing price? Is $50 a profit maximizing price? Y/N (circle one) Profit Maximizing Price
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5 int ences $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 0 N MR units MC Quantity D 4 5 6 7 8 9 10 11 Tools DWL Instructions: In parts a and b, enter your answers as a whole number. In parts c-e, round your answers to two decimal places. a. What is the profit-maximizing level of output? b. What price will the monopolist charge to maximize profits? $ CS c. Determine the efficiency costs (deadweight loss) of monopoly output/pricing. Instructions: Use the tool provided 'DWL' to illustrate this area on the graph. Drag the points to move or resize. What is the efficiency cost (deadweight loss) of monopoly output/pricing? d. Determine the consumer surplus under monopoly output/pricing. Help Save & Exit Submit
2. As a monopolist, what quantity does DeBeers produce? What price do they charge? An ATC curve has been provided for DeBeers. These costs include marketing, mining exploration, and more.
For a monoply A)Plot Margin revenue, demand, marginal cost, to find profit-maximizing price and output.-using midpoint B) using 17/6 as the avg cost what is the profit for the monopolist QD Demand Revenue Marginal Revenue Marginal Cost 0 8 0 NA NA 1 7 7 7 5 2 6 12 5 3 3 5 15 3 2 4 4 16 1 2 5 3 15 -1 3 6 2 12 -3 4 7 1 7 -5 7
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