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

See similar textbooks

Similar questions

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
Price and cost MO 120 Township is a small, isolated community served by one newspaper that can meet the market demand at a lower cost than two or more newspapers could. The Township Gazette is the only source of news. The graph shows the marginal cost of printing the Township Gazette and the market demand for it. The Township Gazette is a profit-maximizing, single-price monopoly. What is the efficient number of copies of the Township Gazette and what is the price at which the efficient number of copies could be sold? 100- The efficient number of copies of the Township Gazette is and the price at which this number could be sold is cents a copy. GALLE 80- 60- 40- 20- D 04 0 100 200 300 400 500 Quantity (newspapers per day) 600 5
One way a monopoly can convert additional consumer surplus into economic profit is to O price discriminate raise prices O lower prices
Over a recent family dinner, your Aunt Trudy expresses her disdain for price discriminating monopoly businesses, to which you, having taken some economics reply, "A perfect price discriminating monopoly may convert all of the consumer surplus to monopoly profit, but at least it produces O A. more output than a competitive industry would produce. OB. the same output that a competitive industry would produce. C. at the minimum of its average total cost (ATC) curve. D. where its marginal cost (MC) curve is still declining.
While firms in perfect competition maximize profit by producing at a quantity where the marginal cost of producing another unit of a good is equal the the marginal revenue from producing another unit, monopoly firms will maximize profit by producing at a quantity where marginal cost of producing another unit is equal to O the marginal profit O the average total cost the price of the good the marginal revenue (the same as perfect competition)
15 Refer to the following table. The information pertains to the demand curve and the average cost curve for a natural monopoly firm. What will the price be in this market? Price Quantity Demanded LRAC 50 1 $10.00 35 2 $20.00 20 3 $24.00 4 $37.50 A $35 $20 $50 DO $5
Answer it correctly please. I will rate accordingly. Give correct reason of your choice.
1.
MC Price AC AR 2345 MR Quantity The diagram above represents a monopoly firm. At which output level will the monopolist maximize profits? O A. Output level 3 B. Output level 4 O C. Output level 1 O D. Output level 5
6. Under a monopoly, the quantity sold and market price are determined by the demand function. If the demand function for a profit-maximising monopolist is P= 274 - Q and MC = 4 + 3Q, find thel.consumer's surplus.
Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out Price Quantity Total cost (dollars per month) (dollars (rides the total cost schedule. per ride) per month) Suppose the government taxes Hot Air by S60 per ride. 250 20 Calculate Hot Air's new profit-maximizing quantity, price and economic profit. 230 100 ... 210 200 Hot Air's new profit-maximizing output is rides a month and the firm's profit-maximizing price is $a ride. >>> Answer to 1 decimal place. 190 3 320 170 4 460 150 620 When Hot Air produces the new profit-maximizing output and charges the profit-maximizing price, it of s >>> Answer to 1 decimal place. >>> If the firm incurs an economic loss, select economic loss in the dropdown box and do not enter a minus sign.
PRICE (Cents per Kilowatt-hour) 5 MR 2 QUANTITY (Thousands of kilowatt-hours) ATC MC 10 O True Which of the following statements are true about this natural monopoly? Check all that apply. O False D The electricity company must own a scarce resource. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. Monopoly Outcome In order for a monopoly to exist in this case, the government must have intervened and created it. The electricity company is experiencing economies of scale. ? True or False: Without government regulation, natural monopolies can earn positive profit in the long run.