Two countries, both having a monopoly on Y, decide to engage in trade. Graphically illustrate and discuss the welfare effects on country H when the monopoly in country H has a relatively lower cost structure than c

Two countries, both having a monopoly on Y, decide to engage in trade. Graphically illustrate and discuss the welfare effects on country H when the monopoly in country H has a relatively lower cost structure than c

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

consider a dmoestic monopoly in a small country that produces a good with the following inverse demand curve: P = 100 - 1/4Qd. The monopoly has marginal cost of MC = 20 + 1/2Q. In the absence of free trade, complete the following: A) Calculate the equilibrium price and quantity. B) Calculate the consumer surplus, producer surplus (note the shape), and total surplus. Now, suppose the home market opens up to free trade ant that the world price is $60 per unit. C) Calculate the home firm's quantity (supplied), home quantity (demanded), import quantity, and price. D) Calculate the consumer surplus, producer surplus, and total surplus. Now, suppose the home market opens up to free trade, but imposes a tariff of $10. E) Calculate teh equilibrium price and…
figure 9-3 included
Rent seeking: The following graph shows the demand, marginal revenue, marginal cost curves for a single - price monopolist that produces a drug that helps relieve arthritis pain. Place a star symbol in the appropriate location on the graph to indicate the monopoly outcomes such that the dashed lines reveal the profit, maximizing price, and quantity of a single price monopolist. Then use the green rectangle to show the profits earned by the monopolist. Suppose that should the patent on this particular drug expire, the market would become perfectly competitive, with new firms, immediately entering the market with essentially identical products. Further, suppose that, in this case, the original firm will hire lobbyist, and make donations to several key politicians to extend its patent for one more year. The farm is prepared to spend up to -------$ million to extend its patent?
In a bilateral monopoly, suppose we have the following information: P = 1000 - 2Q (Demand) P = 100 + 8Q (Supply) MR = 1000 - 4Q %3D MC = 100 + 16Q What would the price be in the unrestrained monopsony equilibrium using this information?
Consider a small country with a Home monopolist and a perfectly competitive global market. The graph below shows the Home market demand function DM with the corre- sponding marginal revenue curve MRM, and the monopolist's marginal cost function MO. The world price of one unit of a good is pW = 25. Home country introduces an import quota which shifts the demand function for the monopolist's products to De and marginal revenue to MR Price free trade? 50 40 35 30 25 20 0 20 25 MRQ MRM 40 MC 50 10 De Di 80 100 Q What is the equilibrium price, country's imports, and monopolist's output under ii. How much of imported good is allowed to be sold at Home under quota? What are the equilibrium price and monopolist output under import quota?
Suppose that the demand for good x is given by : P=100-8q Marginal cost of production is given by : P=10+2q MR is given by 100-16q What will the equilibrium quantity and price be in a competivite market? Calculate consumer, producer and total surplus. If we contrast this market to one in which good x is produced by a monopoly, what will be the quantity produced and the price each unit will be sold as? Calculate consumer, producer and total surplus. What will be the loss in total surplus due to a monopolist?
Import tariff against a foreign monopolist a) always leads to a decrease in domestic welfare b) can increase domestic welfare c) welfare improving only if a foreign firm is dumping d) welfare improving only if a foreign firm is not dumping
Consider the graph below that represents the demand curve for a good, the marginal revenue of a potential monopolist, and the marginal cost before an innovation (MC1 = 1) and after a potential innovation of size y (MC2 = 1/y). In the initial period, all firms have the same marginal cost MC1. A single firm can choose to try to innovate. If it is successful, it becomes a monopolist in the second period with marginal cost MC2. 1 1/Y Demand Marginal revenue MC1 MC2 ୪
#1 A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is p = 100 – Q, and the Japanese inverse demand function is p = 80 – 2Q. The firm's marginal cost is MC = 20 in both %3D countries. What price will it charge in both markets if the firm can prevent resale?
The “Free the Beer” case is currently before the Supreme Court of Canada. In 2012 Gerard Comeau, 64, was fined $292.50 for bringing 14 cases of beer into New Brunswick from Quebec where the liquor taxes are cheaper. Every province in the country has signed on to the case to defend their monopoly right to sell and tax alcohol in their province. What is ironic about this given that Canada is also renegotiating NAFTA, entering into the Trans Pacific Partnership, and other international trade agreements? Why do you think the provinces have all signed up to defend these barriers?
The demand a monopoly faces is p = 400 - Q+A 0.5 where Q is its quantity, p is its price, and A is the level of advertising. Its marginal cost of production is $40, and its cost of a unit of advertising is $1. What is the firm's profit equation? The monopoly's profit equation (л) as a function of Q and A is π= (400-Q+A05) Q-40Q-A. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.) The monopoly's profit-maximizing price is p = $270, quantity is Q = 260, and advertising is A = 16900. (Enter numeric responses using real numbers rounded to two decimal places.)
A small monopoly manufacturer of widgets has a constant marginal cost of $20. The demand for this firm's widgets is Q=105−1P. Part 2 Given the above information, compute the social cost of this firm's monopoly power. The social cost is $enter your response here. (Round your response to the nearest penny.)