The degree of rivalry in a market moves from high to low in the following order: monopoly, imperfect competition, and perfect competition. O perfect competition, imperfect competition, and monopoly. O monopoly, perfect competition, and imperfect competition. O imperfect competition, monopoly, and perfect competition.

The degree of rivalry in a market moves from high to low in the following order: monopoly, imperfect competition, and perfect competition. O perfect competition, imperfect competition, and monopoly. O monopoly, perfect competition, and imperfect competition. O imperfect competition, monopoly, and perfect competition.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 13E

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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?
How is monopoly different from perfect competition?
The graph illustrates an industry in which many firms operating in perfect competition are taken over by one firm that operates as a single-price monopoly. Draw the following shapes: 1) the consumer surplus arising from monopoly. Label it CS. 2) the deadweight loss arising from monopoly. Label it DWL 3) the loss of consumer surplus that is a gain to the monopoly as producer surplus. Label it Monopoly's gain. Indicate whether each of the following statements is true or false. At the competitive equilibrium, marginal social benefit equals marginal social cost. At the competitive equilibrium, the sum of consumer surplus and producer surplus is maximized. At the long-run competitive equilibrium, firms produce at the lowest possible long-run average cost. 30- 25- 20 15- 10- 5- Price and cost (dollars per haircut) 0+ 0.0 MR 1.0 2.0 3.0 4.0 Quantity (thousands of haircuts) MSC 5.0
Which of the following will always be true for both single-price monopoly and monopolistic competition in the short run? Price equals marginal cost. Price is greater than marginal revenue. Short run profits are positive. O Price equals marginal revenue.
The figure to the right shows the average cost of production (AC) for a cable company that is a monopoly as well as the corresponding demand (D) for cable subscriptions in the city to which the company provides service. Is this company a natural monopoly? This firm O A. is a natural monopoly because average cost is decreasing when it crosses demand. B. is not a natural monopoly because its demand is downward sloping. C. is a natural monopoly because total cost does not always increase with output. O D. is a natural monopoly because it has excess capacity. O E. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80- 76- 72- 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D AC 5 6 8 9 Quantity (cable subscriptions in 1000s) Ⓡ 10
Consider a monopoly firm in the short run for which marginal revenue equals rising marginal cost at 150 units of output. At this output, the firm's total cost is $2000, total fixed cost is $800, marginal revenue is $3, and elasticity of demand is 2. Which of the following statements is correct about this firm? The firm should expand production beyond 150 units. O The firm is making a loss greater than total fixed cost and should shut down. The firm is making a profit and should continue to produce 150 units. The firm is making a loss smaller than total fixed cost and should continue to produce 150 units.
One of these four answers best represents the condition that generates a natural monopoly. Which one? OA single firm controls an industry because there are very few customers in the industry. The government prohibits entry into an industry. O The firm takes anti-competitive actions to keep other firms out. O Economies of scale are large relative to quantity demanded in a market
There are thousands of broadband internet providers in the country, while in a particular city the only way you can get it is through the phone, the cable company, and through DIRECTV. The best model to analyze this market is O monopoly. O monopolistic competition O oligopoly. O perfect competition.
A monopoly is maximizing profit. Its marginal cost then increases. Which of the following would you expect? (Suggestion: draw a graph to help you answer this question.) O The firm will increase its output and charge a higher price. O The firm will decrease its output and charge a higher price. O The firm will decrease its output and charge a lower price. O The firm will increase its output and charge a lower price.
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Why does a monopoly arise? O because of diseconomies of scale because entry to an industry is blocked because of elastic demand because firms want to maximize profits