The following diagram illustrates the demand curve fac- ing a monopoly in an industry with no economies or diseconomies of scale and no fixed costs. In the short and long run, MC = ATC. Copy the diagram and indicate the following:

The following diagram illustrates the demand curve fac- ing a monopoly in an industry with no economies or diseconomies of scale and no fixed costs. In the short and long run, MC = ATC. Copy the diagram and indicate the following:

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Monopoly

Section: Chapter Questions

Problem 2WNG

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Question

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2.5 The following diagram illustrates the demand curve fac-
ing a monopoly in an industry with no economies or
diseconomies of scale and no fixed costs. In the short and
long run, MC = ATC. Copy the diagram and indicate the
following:
2MA
0
D
MC = ATC
Output, Q
a. Optimal output
b. Optimal price
c. Total revenue
d. Total cost
e. Total monopoly profits
f. Total "excess burden" or "welfare costs" of the monopoly
(briefly explain)

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