The table below shows cost data for producing different amounts of cleaning products. Suppose this market is a monopoly. Use the information in the table to find the output where the monopoly would maximize profit. Price ($) Quantity Total Revenue ($) Total Cost ($) 150 0 0 100 120 5 600 180 100 10 1000 400 90 15 1350 675 80 20 1600 1120 70 25 1750 1750 Profit maximizing quantity: What is the profit the monopoly achieved? $

The table below shows cost data for producing different amounts of cleaning products. Suppose this market is a monopoly. Use the information in the table to find the output where the monopoly would maximize profit. Price ($) Quantity Total Revenue ($) Total Cost ($) 150 0 0 100 120 5 600 180 100 10 1000 400 90 15 1350 675 80 20 1600 1120 70 25 1750 1750 Profit maximizing quantity: What is the profit the monopoly achieved? $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You have been granted a monopoly in the avocado market. The market demand for avocados is Q = 2000 – 2P. Your cost structure is such that your total costs are TC = 1000+ 400Q. (limit: whatever needed) What is your profit maximizing price and quantity? Explain this in words and show it graphically. What are the profit, producer surplus and consumer surplus? The government is thinking about breaking your monopoly into ten identical firms and giving ownership to 10 random people. Correspondingly, each firm would have a fixed cost of $1000 and a marginal production cost of $400 per unit. In this perfectly competitive environment, what would be the equilibrium price and quantity? Explain this in words and show it graphically. What are the profit per firm, producer surplus and consumer surplus that correspond to your answer to part d)? How much would you be willing to pay to keep the government from taking your monopoly away? Explain.
Explain how a monopoly arises and distinguish between a single-price monopoly and a price-discriminating monopoly.
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Which of the following is most likely to be a monopoly? options: local utility company local gym local grocery store local coffee shop
You have been granted a monopoly in the avocado market. The market demand for avocados is Q = 2000 – 2P. Your cost structure is such that your total costs are TC = 1000+ 400Q. (limit: whatever needed) What is your profit maximizing price and quantity? Explain this in words and show it graphically. What are the profit, producer surplus and consumer surplus? The government is thinking about breaking your monopoly into ten identical firms and giving ownership to 10 random people. Correspondingly, each firm would have a fixed cost of $1000 and a marginal production cost of $400 per unit. In this perfectly competitive environment, what would be the equilibrium price and quantity? Explain this in words and show it graphically. What are the profit per firm, producer surplus and consumer surplus that correspond to your answer to part d)? How much would you be willing to pay to keep the government from taking your monopoly away? Explain.
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