The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below- The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market Instructions. Use the tool provided (Pt. A) to identify the profit-maximizing price and quantity. Then use the tool "Profit" to draw the profit that occurs at this price and quantity. Price/Cost ($) 60 50 8 40 30 20 10 MC MR Tools PLA Profit ATC AVC 10 20 30 40 50 60 0 Quantity Instructions: Round your answer to the nearest whole number Profit for the monopolist is

The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below- The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market Instructions. Use the tool provided (Pt. A) to identify the profit-maximizing price and quantity. Then use the tool "Profit" to draw the profit that occurs at this price and quantity. Price/Cost ($) 60 50 8 40 30 20 10 MC MR Tools PLA Profit ATC AVC 10 20 30 40 50 60 0 Quantity Instructions: Round your answer to the nearest whole number Profit for the monopolist is

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 2WNG

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Onestore has monopoly power in Smalltown. Assume that Onestore is a profit maximizing firm and currently operates at a negative economic profit in the short run.(a) Draw a correctly labelled diagram for Onestore and show each of the following:(i) The profit maximizing price and quantity labelled as Pm and Qm respectively (ii) Shade completely, the area representing the negative economic profit (b) Explain why Onestore continues to operate in the short run despite earning negative economic profit in the short run. c. A single price monopolist’s demand curve is given by:P = 240 – 3qand its total cost curve is given byTC = 30 + 6q Calculate the monopolist’s profit maximizing level of output Calculate the profit maximizing price for the monopolist What is the profit of the monopolist?
How do you find the profit maximizing PRICE (not level of output) on a graph for a monopoly with demand, marginal revenue, marginal cost, and average total cost curves. Group of answer choices Find the minimum point on the ATC curve and go straight over to the price axis. Find the point where MR = MC and go straight over to the price axis. Find the point where MR = MC, go straight up until you hit the demand curve, and then go straight over to the price axis. Find the point where demand hits marginal cost and go straight over to the price axis.
Price and cost (dollars per hamburger) 5.00 4.50 4.00 MC 3.50 3.00 2.50 2.00 1.50 1.00 0.50 MR 10 20 30 40 50 Quantity (hamburgers per hour) Suppose the Busy Bee Cafe is the monopoly producer of hamburgers in Hugo, Oklahoma. The above figure represents the demand, marginal revenue, and marginal cost curves for this establishment. What price will the Busy Bee charge to maximize its profit? A. $1.00 for a hamburger OB. $3.00 for a hamburger OC. $5.00 for a hamburger OD. $2.00 for a hamburger O E. $4.00 for a hamburger
Consider a market with a monopoly firm. Sales revenue of this firm is $15,960,000 total cost is $8,680,000 and average cost is $3.10 Another firm wants to enter the market and provide the same product at a lower price. To intimidate the potential competitor, the monopoly firm intends to use predatory pricing.By how much can this firm reduce the price of its product without losses? Enter your answer in the box below and round to two decimal places if necessary.
Please note: I had to adjust the MC and ATC curves on this problem, but the labels for MC and ATC did not move. So, the dark blue line is the ATC line, and the red line is the MC line. Calculate the firm's profit if they are a single-price monopoly: Profit = $ Calculate the firm's profit if they are a perfect price discriminating monopoly: Profit = $ Calculate the firm's profit if they price discriminate as follows: Sell the first 2500 units at a high price and the rest of the units at a low price: Profit = $ Calculate the firm's profit if they price discriminate as follows: Sell the first 2000 units at a high price, the next 1000 units at a medium price, and the rest of the units at a low price: Profit = $ 30- 28- 26- Price and cost (dollars per unit) 24- 22- 20- 18-17.5 16- 14- 12- 10- 8- 6- 4- 2- 0+ 0.0 MC 2.0 ATC €2.5 MR 3.0 1.0 5.0 4.0 Quantity (thousands of units per year) D 6.0
An unregulated natural monopoly bottles Mt. McKinley air, unique clean air that has no substitutes. The monopoly's total fixed cost is $30,000 a year and its marginal cost is 10 cents a can. The graph illustrates the demand for Mt. McKinley air. Draw the average total cost curve. Plot the four control points at the quantities 100,000, 200,000, 300,000, and 400,000. Label the curve. Draw a point at the new quantity and price if the regulator sets a price cap such that the monopoly breaks even. The number of cans produced sold its marginal cost. A. is; benefit; exceeds B. is not; benefit; exceeds OC. is not; revenue; is greater than D. is; revenue; equals the efficient quantity because the marginal from the last can 60- 50- 40- 30- 20 20 10- Price (cents per can) 0- ATC MC D $300 100 200 300 400 Quantity (thousands of cans per year) >>> Draw only the objects specified in the question. 500
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -5, while group 2’s is -6. Your marginal cost of producing the product is $20.a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places.Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits.Instructions: You must make a selection for each option. For correct answer(s), place a check mark. For incorrect answer(s), leave an empty box.check all that apply At least one group has elasticity of demand less than one in absolute value.unanswered At least one group has elasticity of demand greater than 1 in absolute value.unanswered We are able to prevent resale between the groups.unanswered There are two…
You are a consultant who is advising a monopoly on the optimal pricing strategy. Your analysis has yielded the following information. • The marginal cost (MC) is $3. • The demand equation is P = 90 - 3Q . The total cost (TC) is given by 35+ 3Q The marginal revenue (MR) is given by 90 - 6Q Based on this information, answer the following questions. Show FULL calculations! (a) Following the concepts of profit maximization, what is the profit maximizing quantity for this monopoly? (b) Following the concepts of profit maximization, what is the profit maximizing price for this monopoly? (c) Following the concepts of profit maximization, what is the monopoly's profit at the profit maximization point?
Quantity, price, total revenue, and total cost for a monopoly firm that produces cement are listed in the table below. Quantity, (Q) (tons) Price (P) Total Revenue (TR) Total Cost (TC) 1 $1,050 $1,050 $1,050 2 $970 $1,940 $720 3 $890 $2,670 $870 4 $810 $3,240 $1,140 5 $730 $3,650 $1,550 6 $650 $3,900 $2,020 7 $570 $3,990 $2,600 Determine the firm's profit-maximizing price.
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -4, while group 2’s is -5. Your marginal cost of producing the product is $60.a. Determine your optimal markups and prices under third-degree price discrimination. Instructions: Enter your responses rounded to two decimal places.Markup for group 1: Price for group 1: $ Markup for group 2: Price for group 2: $ b. Which of the following are necessary conditions for third-degree price discrimination to enhance profits.Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click twice to empty the box. At least one group has elasticity of demand greater than 1 in absolute value.unanswered At least one group has elasticity of demand less than one in absolute value.unanswered We are able to prevent resale…
ou are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 200 − 2Q and C(Q) = 1,000 + 3Q2, respectively. a. What price–quantity combination maximizes your firm’s profits? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units b. Calculate the maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? multiple choice 1 Elastic Unit elastic Inelastic d. What price–quantity combination maximizes revenue? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units e. Calculate the maximum revenues. Instructions: Round your response to the nearest penny (two decimal places). $ f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price–quantity…
You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 300 − 3Q and C(Q) = 1,500 + 2Q2, respectively. a. What price-quantity combination maximizes your firm’s profits? Price: Quantity: b. Calculate the maximum profits. $ c. Is demand elastic, inelastic unit elastic Elastic d. What price-quantity combination maximizes revenue? Price: Quantity: e. Calculate the maximum revenues. $ f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination? multiple choice Elastic Unit elastic Inelastic