The accompanying graph depicts the marginal revenue(MR), demand (D), and marginal cost (MC) curves for amonopolya. Place point Pi at the profit maximizing price and quantitvyassuming that the monopolist can only charge a single price.100959085807570652 60b. What are the profits of the firm if it charges a single price?5045Suppose the monopolist able to successfully pricediscriminate between two groups by charging one group $60and charging $35 to the other group.c. What are the firm's profits if it charges the two prices asmentioned above?353025201510MR05 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100Quantity

Monopoly Market:Monopoly market is a market condition where single firm reaping largest market share…

Answered: The accompanying graph depicts the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider a monopolist with the following demand curve. Price: 24, 22 , 20, 18, 16, 14, 12, 10, 8, 6 Quantity Demanded: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 [All answers are integers with no units.] 1.If this firm has a marginal cost of $12 per unit, how many will they produce? 2.What will their profit be? 3.What will consumer surplus be? (Rectangle method!) 4.What is the efficient quantity?
Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit, where the marginal revenue of the 250th unit is $40, the marginal cost of the 250th unit is $50, and the average total cost at 250 units is $60. [Hint: Based on the information given, is the quantity you’re asked to show the profit-maximizing quantity? Think about what has to be true for profit-maximization.] Based on the graph and assuming the firm attempts to profit maximize (and succeeds), what would happen to price, quantity, MR, MC, and ATC? (rise, fall, or stay the same?)
Suppose that a monopolist faces inverse demand given by P = 100 - 10Q and marginal cost given by MC = 20. 1. What is the profit function? 2. What is the marginal revenue function? 3. What is the equilibrium quantity? 4. What is the equilibrium markup?
Refer to the accompanying graph to answer the next six questions. Price D MR D and H B and F A and H Which price and quantity combination is most desirable from the monopolist firm's point of view? A and E G H C and G D ATC MC Quantity
Consider the electricity industry, in which there are very large fixed costs but also in which variable costs are directly proportional to total output so that the marginal cost of each unit produced is small and constant. a) Assuming that one firm has an electricity monopoly, draw a diagram that shows the price the monopolist charges and the quantity the monopolist sells at this price. Be sure to include marginal cost, average total cost, marginal revenue, and demand curves in your diagram. What happens if the electricity industry is perfectly competitive? More specifically, let us assume that the marginal cost curve from part (a) is equal to the perfectly competitive market supply curve. In this case, show in a diagram what the perfectly competitive equilibrium price and quantity in this industry are. What will happen to the number of firms producing electricity in the long run? What does this say about the desirability of monopoly vs. perfect competition in this industry?…
1. A firm faces the following inverse demand curve: P = 500 - 0.25Q Where: Q is the monthly production P is price, measured in dollars per unit. The firm also has a total cost (TC) function of: TC = 200Q. Assuming the firm maximizes profits, answer the following: a) Assuming the firm operates as a monopolist, calculate the following: price, quantity, and profit. Graph and show the equilibrium price and quantity. b) Assuming perfect competition, what are price, quantity and profit? Show on the graph from above.
What is the usual shape of a marginal revenue curve for a monopolist? Why? When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge? Is a monopolist allocatively efficient? Why or why not? ALCOA does not have the monopoly power it once had. How do you suppose their barriers to entry were weakened? For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and most recently Google, on the grounds that their large market share made them essentially monopolies. In a global market, where U.S. firms compete with firms from other countries, would this policy make the same sense as it might in a purely domestic context? If public utilities are a natural monopoly, what would be the danger in deregulating them? Why does regulatory capture reduce the persuasiveness of the case for regulating industries for the benefit of consumers? In the middle of the twentieth century, major U.S. cities had multiple…
PRICE 1 2 10. Study Questions and Problems #10 The following graph represents a natural monopolist. Suppose that regulators have set the fair-return price at $3. Use the black point (cross symbol) to indicate the equilibrium under unregulated monopoly. Then use the grey point (star symbol) to indicate the equilibrium for the monopoly regulated by marginal cost pricing. Finally, use the purple point (diamond symbol) to indicate the equilibrium for the monopoly regulated by fair-return pricing. 5 • + MC Pricing Monopoly Pricing LRAC Fair-Return Pricing LRMC MR D 0 0 1 2 3 4 5 6 7 8 QUANTITY Use the graph to complete the following table. Pricing Price (Dollars) Quantity (Units) Stays in Business? Unregulated monopoly $ Marginal cost pricing $ Under which of the following pricing regulations will the monopolist stay in business? Check all that apply. Fair-return pricing Marginal cost pricing Monopoly pricing
The diagram below shows a monopolist's marginal cost schedule and the demand curve. Find and depict the following items within the diagram and briefly explain how you found them: Price Monopoly Price Demand Marginal Revenue Total Surplus Quantity Maximising Quantity b) Draw a possible marginal cost curve for the monopolist into the diagram that is consistent with all the other curves that are already given. c) Based on the marginal cost curve that you constructed in part (b), find and highlight the monopolist's total costs at the monopoly price in the diagram. d) Briefly explain the shape of the marginal revenue curve as compared to the demand curve in the diagram.
Please Answer part f . please draw the complete graph Suppose a monopolist faces demand D = 6 − Q and MR = 6 − 2Q, and has costs T C = 1 + 2Q, and MC = 2. The monopolist is unable to price discriminate. a. Derive the ATC. Is this a natural monopoly and why?. b. Draw the demand curve, MR, MC, ATC on a graph. Make sure to label the curves and axes clearly Calculate the value of the optimal Q and P. Label this on the graph of the previous question (part b). d. Calculate the value of the profit at this point. Also label this on the graph (part b). e. The government’s antitrust division determines this monopoly has too much market power. It has two options: break the monopoly into two smaller companies, or regulate it using a price ceiling. Which should it do and why?. f. The government has decided to enact the price ceiling. On the graph, label the price ceiling that maximizes consumer surplus. Indicate this consumer surplus on the graph (part b).
Use the following Table showing the demand schedule for a monopolist facing a constant marginal cost of $4. Assume that the firm pays no fixed costs. How many units of output will the firm produce, and how much economic profit will be earned? Quantity Demanded 1 2 3 4 5 6 7 8 9 Price $12 $11 $10 $9 $8 $7 $6 $5 $4 A) 5 units; $8 B) 5 units; $40 C) 7 units; $36 D) 7 units; -$6 E) 5 units; $20
The following table (see MS Word/PDF version of Take-Home Quiz #5 handout, page 1) shows a market demand a monopolist is facing. Use the table to answer questions #4 thru #6. Average Marginal Marginal Rev. Total Economic Quantity Price Total Rev. Rev. Cost Cost Profit (Q) (P) (TR) (AR) (MR) (MC) (TC) (II) === =====%3D ====== =====3= 1 35 35 11 11 24 64 32 29 11 22 42 3 29 11 4 17 11 23 11 11 6. 120 11 7 17 -1 11 -7 11 9 99 11 -13 11 10 80 8. 11 [Extra Credit 2 pts] Fill all blanks in the Table 1 on the Quiz #5 handout. You will receive extra credit if you submit the completed table via email. Q4. If the monopolist sells 8 units of its product, how much total revenue (TR) will it receive from the sale? 40 O 87 O 104 O 112 O 164

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS