The figure to the right shows the average cost of production (AC) for a cablecompany that is a monopoly as well as the corresponding demand (D) for cablesubscriptions in the city to which the company provides service.Is this company a natural monopoly?This firmO A. is a natural monopoly because average cost is decreasing when itcrosses 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 withoutput.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-DAC5689Quantity (cable subscriptions in 1000s)Ⓡ10

A monopoly market is defined as the output produced by solely one market. The output price is…

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. O 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. O E. is a natural monopoly because it has excess capacity. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80 76- FONOS 724 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D 6 Quantity (cable subscriptions in 1000s) AC 10

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. O 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. O E. is a natural monopoly because it has excess capacity. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80 76- FONOS 724 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D 6 Quantity (cable subscriptions in 1000s) AC 10

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

In the United States, antitrust laws O A. regard excess competition as a felony under Section 3 of the Sherman Act. O B. place a maximum limit of 125 firms that are allowed to compete in any market. O C. do not always prosecute firms if they have fixed their prices. D. do not allow one person to be a director of two competing firms if being a member "substantially lessens competition". E. break up a company if it is too large because "size itself is an offense."
Which of the following does not describe a monopoly market? Select one: O a. Profit maximizing output is chosen, where marginal revenue equals marginal cost O b. A single seller and price maker O c. Price is higher than marginal cost or marginal revenue O d. No barriers to entry and/or exit Australian Institute of Business & Management trading as King's Own Institute
Monopoly ceases if the demand for the good is Little flexibility. O O not flexible. Flexibility equivalent. O flexible.
In the Cournot model the final level of output is the output that would be produced if the industry was a monopoly, and is the output that would be produced if the industry was perfectly competitive. O a. greater than; less than O b. greater than; equal to Oc. equal to; less than O d. less than; greater than In the Cournot model, when a new firm begins production it assumes its demand curve is O a. the market demand less the amount the other firm is selling. O b. the market demand plus the amount the other firm is selling. Oc. the same as the competing firm's demand curve. O d. one-half of the competing firm's demand curve.
A monopoly firm's total cost is: TC(Q) = Q° + 15Q + 225. if the industry's demand curve is described by P= 195 - 4Q. How much profit will this firm make if it is applying the profit maximizing rule? (Hint: MC = 20 + 15) O a$ 2025 O b.$ 1575 Oc.$ 279 O d. $ 3775 O e.$ 506
#2
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 the marginal revenue (the same as perfect competition) the marginal profit the average total cost O the price of the good 10:04 P Bi 63°F Cloudy 5/20/202 e here to search O
The figure to the right illustrates market demand for a monopoly along with its average total cost (ATC) curve. Is the monopoly a natural monopoly? The firm O A. is a natural monopoly because its demand curve is downward sloping. O B. is a natural monopoly because it has the potential to earn economic profits. OC. is not a natural monopoly because its demand curve is not infinitely elastic. O D. is not a natural monopoly because it experiences diseconomies of scale. OE E. is a natural monopoly because it can supply the entire market at lower average total cost than can two or more firms. Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for one firm compared to two firms? One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response as an integer.) Price and cost (dollars per unit) 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 4 6 ATC Demand 8 10…
Monsanto holds significant regional monopoly power-in some regions they are a true monopoly being the only seller of agriculture seeds. If the elasticities of demand, JEDI, for soybean seeds is 3.5, and 3 for corn, then the profit-maximizing price (relative to marginal cost) for soybeans is times marginal cost, and the price is times marginal cost for corn. Round to one decimal if needed. A Moving to another question will save this response. « >
QUESTION 10 For a monopoly firm: O A. total revenue is a straight, O B. the marginal revenue curve lies O C. the marginal revenue curve lies O D. the marginal revenue curve lies upsloping line because a firm's sales are independent of product price above the demand curve because any below the demand curve because below the demand curve because reduction in price applies to all units any reduction in price applies to any reduction in price applies only to the extra unit sold sold all units sold
Which of the following statements regarding a profit-maximising monopolist is FALSE? O a. This firm might respond to a fall in demand by reducing both its output and its price. O b. This firm might respond to a fall in demand by reducing its output and increasing its price. O c. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price. d. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.
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.