Use the graph to the right for a monopoly to answer the questions. What quantity will the monopoly produce, and what price will the monopoly charge? The monopoly will produce 84 units and charge $ 3.4 per unit. (Enter numeric responses using real numbers rounded to two decimal places.) Suppose the government decides to regulate this monopoly and imposes a price ceiling of $2.60 (in other words, the monopoly can charge less than $2.60 but can't charge more). Now what quantity will the monopoly produce, and what price will the monopoly charge? The monopoly will produce unit. units and charge $ per Price and cost per unit 4.80 4.40 4.00- 3.60- 3.20- MC 2.80- 2.40- 2.00- 1.60- 1.20- 0.80- 0.40- 0- 0 16 32 48 60 72 84 96 108 120 132 1 Quantity

Use the graph to the right for a monopoly to answer the questions. What quantity will the monopoly produce, and what price will the monopoly charge? The monopoly will produce 84 units and charge $ 3.4 per unit. (Enter numeric responses using real numbers rounded to two decimal places.) Suppose the government decides to regulate this monopoly and imposes a price ceiling of $2.60 (in other words, the monopoly can charge less than $2.60 but can't charge more). Now what quantity will the monopoly produce, and what price will the monopoly charge? The monopoly will produce unit. units and charge $ per Price and cost per unit 4.80 4.40 4.00- 3.60- 3.20- MC 2.80- 2.40- 2.00- 1.60- 1.20- 0.80- 0.40- 0- 0 16 32 48 60 72 84 96 108 120 132 1 Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 Esc 3.50 + PRICE (Dollars per can) 3.00 + 2.50 78°F Sunny 2.00 1.50 1.00 + MC 0.50 + F1 1 F2 Ö- @ ATC F3 0+ # F4 F5 ▬ Monopoly Outcome 0 Profit COL F6 Loss O F7 1 F8 n F9 F10 F11 F12 2 Fn Lock ( 1 6/2 Insert Prt Sc
A patent gave Sony a legal monopoly to produce a robot dog called Aibo ("eye-BO"). The Chihuahua-size pooch robot can sit, beg, chase balls, dance, and play an electronic tune. When Sony started selling the toy in July 1999, it announced that it would sell 3,000 Aibo robots in Japan for about $2,000 each and a limited litter of 2,000 in the United States for $2,500 each. Suppose that Sony's marginal cost of producing Aibos is $500. Its inverse demand curve is Pj = 3500 - 0.5Qj in Japan and Pa = 4500 - Qa in the United States. Solve for the equilibrium prices and quantities (assuming that U.S. customers cannot buy robots from Japan). The equilibrium quantity in Japan is 3000 and the price, pj, is $ 2000. (round your answers to the nearest integer) The equilibrium quantity in the U.S. is 2000 and the price, pa, is $ 2500. (round your answers to the nearest integer) Show how the profit-maximizing price ratio depends on the elasticities of demand in the two countries. Pj Pa 1+1/a 2,000…
Is it inevitable that the monopoly price of a commodity must be higher than its competition price? why
Use the following graph of a monopoly market to answer this question: P $13 $10 150 300 Which of the following statements is an accurate interpretation of the graph? This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 150 are willing to pay exactly $10. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 150 consumers willing to pay between $10 and $13. This firm engages in price discrimination by negotiating on price with each of its customers. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 300 consumers willing to pay between $10 and $13. This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 300 are willing to pay exactly $10.
Explain how a monopoly arises and distinguish between a single-price monopoly and a price-discriminating monopoly.
In the linear example illustrated in the figure to the right, how does charging the monopoly a specific tax of t = $8 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes tax revenue)? What is the incidence of the tax on consumers? Determine how imposing the tax affects the monopoly optimum. Use the line drawing tool to show how the tax affects the monopoly's cost of production by drawing a new marginal cost curve with the tax. Label this line 'MC¹'. Carefully follow the instructions above, and only draw the required objects. p, $ per unit 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 2 3 4 MC D MR 5 6 7 8 9 10 11 12 13 Q, Units per day
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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
To answer this question, you will want to work out the answer using a graph on a piece of scratch paper (not turned in). You are going to compare the outcomes in the case where there is perfect competition to the monopoly case. So, as an intermediate step, you will need to compute the equilibrium outcomes under competition and monopoly. Suppose that you have the following information about the demand for oil. Price ($/barrel) 80 70 60 50 40 30 20 10 Suppose that the marginal cost to produce a barrel of oil is $20. What is the deadweight loss if the oil market is a monopoly? Quantity demanded(# barrels) 5 6 7 8 9 10 11 12
A patent gave Sony a legal monopoly to produce a robot dog called Aibo ("eye-BO"). The Chihuahua-size pooch robot can sit, beg, chase balls, dance, and play an electronic tune. When Sony started selling the toy in July 1999, it announced that it would sell 3,000 Aibo robots in Japan for about $2,000 each and a limited litter of 2,000 in the United States for $2,500 each. Suppose that Sony's marginal cost of producing Aibos is $500. Its inverse demand curve is P₁ = 3500-0.5Q in Japan and Pa = 4500-Qa in the United States. Solve for the equilibrium prices and quantities (assuming that U.S. customers cannot buy robots from Japan). The equilibrium quantity in Japan is 3000 and the price, p, is $ 2000. (round your answers to the nearest integer) The equilibrium quantity in the U.S. is 2000 and the price, p, is $ 2500 (round your answers to the nearest integer) Show how the profit-maximizing price ratio depends on the elasticities of demand in the two countries. I Pl 2,000 1+1/a 1+1/ Pa…
1. Which of the following companies most closely resembles a monopoly? Walmart Microsoft Starbucks McDonald's Question Source: Chiang 4e - Economics Princip 39 36 近

Consider the local telephone company, a natural monopoly. The following graph shows the demand curve for phone services, the company's marginal revenue curve (labeled MR), its marginal cost curve (labeled MC), and its average total cost curve (labeled AC). (Hint: Click a point on the graph to see its exact coordinates.) PRICE (Dollars per month) 160 140 120 100 80 60 40 20 0 0 1 MR 2 3 4 567 QUANTITY (Thousands of households per month) AC MC D 8 (?)