What is a natural monopoly? O A monopoly that faces a high fixed cost and low marginal costs so that the average total cost curve slopes downward. A market in which there is only one firm. O A monopoly resulting from one firm's exclusive ownership of a natural resource required to produce a good. O A monopoly that results from government issuing patents. Which of the firms is most likely to be a natural monopoly? O A firm that owns nearly all of the diamond mines in the world. O A restaurant that is unable to practice price discrimination and must charge all consumers the same price. O Municipal Power Light, the local supplier of electricity. O A pharmaceutical company that has the exclusive right to sell a patented drug.

What is a natural monopoly? O A monopoly that faces a high fixed cost and low marginal costs so that the average total cost curve slopes downward. A market in which there is only one firm. O A monopoly resulting from one firm's exclusive ownership of a natural resource required to produce a good. O A monopoly that results from government issuing patents. Which of the firms is most likely to be a natural monopoly? O A firm that owns nearly all of the diamond mines in the world. O A restaurant that is unable to practice price discrimination and must charge all consumers the same price. O Municipal Power Light, the local supplier of electricity. O A pharmaceutical company that has the exclusive right to sell a patented drug.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5- Use the figure below to answer the following questions. Price (dollars per unit) 100 80 60 40 20 O 20 MC MR 40 D 60 80 Quantity (units per week) Figure 3 a) Refer to Figure 3. If this market is perfectly competitive, the output level exceeds the single-price monopoly output level by how much? b) Refer to Figure 3. What is the allocative efficient quantity? c) Refer to Figure 3. If this market is a single-price monopoly, then what statement can be made about economic efficiency? Please explain your answer.
A monopolist faces the following demand curve: Price $10 $9 $8 $7 $6 $5 $4 $3 Quantity 5 Select one: O a. 31 units O b. 7 units O c. 16 units O d. 23 units 10 16 23 31 45 52 60 The monopolist has total fixed costs of $40 and a constant marginal cost of $5. What is the profit-maximizing level of output?
For a single-price monopoly shown in the figure below, when its profit is maximized, output will be 95 19 15 45 65 MR MC ATC D 65 units per year and the price will be $15. O I choose to use one of my three skips on this question. O 45 units per year and the price will be $19. 65 units per year and the price will be $19. O 45 units per year and the price will be $15.
By approximately how much did the price of the heart drug for babies increase when a monopoly was established?
While firms in perfect competition maximize profit by producing at a quantity where the marginal cost of producing another unit of a good is equal the the marginal revenue from producing another unit, monopoly firms will maximize profit by producing at a quantity where marginal cost of producing another unit is equal to the marginal revenue (the same as perfect competition) the marginal profit the average total cost O the price of the good 10:04 P Bi 63°F Cloudy 5/20/202 e here to search O
The figure to the right illustrates market demand for a monopoly along with its average total cost (ATC) curve. Is the monopoly a natural monopoly? The firm O A. is a natural monopoly because its demand curve is downward sloping. O B. is a natural monopoly because it has the potential to earn economic profits. OC. is not a natural monopoly because its demand curve is not infinitely elastic. O D. is not a natural monopoly because it experiences diseconomies of scale. OE E. is a natural monopoly because it can supply the entire market at lower average total cost than can two or more firms. Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for one firm compared to two firms? One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response as an integer.) Price and cost (dollars per unit) 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 4 6 ATC Demand 8 10…
When a monopolist spends money to make it harder for competitors to enter the industry, this is referred to as O deadweight loss. innovation protection. O x-inefficiency. rent seeking.
Assume the figure below represents the market for Turkeys. What is the dead-weight loss if this market is operating as a monopoly? Price 50 40 30 20 10 O $1500 O $4000 100 $1000 MR MC ATC Demand 200 300 400 500 There will not be a dead-weight loss since they will be operating at the market equilibrium Quantity
In a market where a monopolist can charge different prices to different groups, which of the following groups will likely be charged the lowest price?O a. the group for which the good is a necessityO b. the group for which the good makes up a large portion of income (big-ticket item)O c. the group for which the good has no good substitutesO d. the group for which the good makes up a small portion of income (small-ticket item)O e. The groups described in (a), (c), and (d) will all get charged a lower price than the group described in (b).
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