The figure shows the market demand curve for telephone calls. Suppose the marginal cost of a telephone call is 2 cents a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. Price and costs (cents per minute) If the firms in the industry operate as a monopoly, there are calls made per hour. minutes of O A. more than 7 million and less than or equal to 9 million O B. between 0 and 3 million OC. more than 3 million and less than or equal to 5 million O D. more than 5 million and less than or equal to 7 million O E. more than 9 million 3- 2- 1- MR 10 12 Quantity (millions of minutes of calls per hour)

The figure shows the market demand curve for telephone calls. Suppose the marginal cost of a telephone call is 2 cents a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. Price and costs (cents per minute) If the firms in the industry operate as a monopoly, there are calls made per hour. minutes of O A. more than 7 million and less than or equal to 9 million O B. between 0 and 3 million OC. more than 3 million and less than or equal to 5 million O D. more than 5 million and less than or equal to 7 million O E. more than 9 million 3- 2- 1- MR 10 12 Quantity (millions of minutes of calls per hour)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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← Itranscript If the natural monopoly shown in the figure is unregulated it will earn an economic profit of OA. $4 million. OB. $9 million. OC. $2 million. OD. SO, that is, it earns a normal profit. Price and costs (dollars per unit) 1968 -NWA 0 1 2 MR LRAC MC 4 D 3 5 6 Quantity (millions of units) Next MEDAL
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Figure Monpo12: A Fim in An Imperfectly Competitive Industry Price MC Given: Q* = 120 P* = S4.00 PATC = S3.40 P* %3D ATC AVC PATC PAVC PAVC = S0.50 D MR Q* Quantity Refer to Figure Monpo12. Profits for this monopoly is about O $72 O No answer text provided. O $74 O No answer text provided.
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Due to barriers to entry, no firms can enter this industry: a b с Quantity 10 20 30 40 50 60 70 80 d Price $23 $20 $18 $16 $14 $12 $10 $8 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. True, if this is a monopoly True, if this is perfect competition Total Revenue None of the above $230 $400 $540 $640 $700 $720 $700 $640 True, if this is monopolistic competition Marginal Revenue $17 $14 $10 $6 $2 -$2 -$6 Total cost $340 $400 $480 $580 $700 $840 $1,020 $1,280 Marginal Cost $6 $8 $10 $12 $14 $18 $26 Average Cost $34 $20 $16 $14.50 $14 $14 $14.57 $16
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Suppose that for a monopoly average total cost is $35, marginal cost is $30, and marginal revenue is $35 with a selling price of $40. To maximize profits, the monopoly should A B C D increase output but decrease price. decrease both output and price. increase both output and price. decrease output but increase price.
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Complete the sentence. With competitive rent seeking, a single-price monopoly's O A. output exceeds that of a competitive industry O B. deadweight loss increases C. producer surplus increases D. economic profit increases
Question 11 Which of the following is a barrier to entry in the monopoly market structure? control over a key resource low prices high prices high quality products O O O O