Which of the following statements is true? O A monopolist can charge whatever price it wants without losing any customers, by virtue of its monopoly position. O A monopolist can always increase its profits by increasing its price. O In the monopoly market structure, there are low barriers to entry. A monopolist is assured of positive economic profits. O none of the above

Which of the following statements is true? O A monopolist can charge whatever price it wants without losing any customers, by virtue of its monopoly position. O A monopolist can always increase its profits by increasing its price. O In the monopoly market structure, there are low barriers to entry. A monopolist is assured of positive economic profits. O none of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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of aboul $92,00 Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 $20 48 70 $20 78 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 3 units, the monopolist earns a total profits of about O $80.00 $92.00 O $112.00 O$110.00 2. 3. 5.
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True or false: Given the total cost function to produce a good, TC = 40 + 20Q a cartel can produce a good at a lower cost per unit than a monopoly. O True O False
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The figure below shows the cost and revenue curves faced by a monopolist. The profit-maximizing output and price for the monopolist are: Figure 9.1 $/Q $30 24 222 420 22 20 10 0 50 100 150 117 MC ATC MR 200 AVC O 117 units and $14, respectively. O 150 units and $22, respectively. O 150 units and $14, respectively. O 117 units and $22, respectively. O 117 units and $24, respectively. D Q
Suppose that the monopolist can produce with total cost: TC = goods in two different markets separated by some distance. The demand curves in the first market and the 200. Assume that the monopolist sells its second market are given by Q, = 240- 4P, and Q2 = 360 - 2P,, if the monopolist can maintain the separation between the two markets, what price levels will prevail in each market, respectively? O P, = 60, P2 = 90 O P, = 50, P, = 110 P = 80, P, = 160 P1 = 40, P2 = 100
Question 11 A firm's market demand for a monopolist is given by P= 120-2Q. His marginal cost of production is 2Q. What level of output would maximize profits? O 0 120 20 30
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…
The monopolist has constant marginal and average cost AC-MC=70 and faces the market demand P120-Q. Suppose the monopolist can perfectly price discriminate by setting a two-part tariff: that is, the monopolist charges the consumer a fixed fee Fand a per unit price p. What are the optimal values of Fand p that the monopolist sets? O F-$2500, p-$70 O F-$3500, p-$70 O F-$2375, p-$95 O F-$1250, p-$70 O F-$2975, p-$85
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.
Suppose that the monopolist sells its goods for two segments of the population and the demand functions are given by Q, = 120P * and Q, = 320P,.f the monopolist can produce at AC-MC=6 and can discriminate the prices what are the optimal prices, respectively? %3D %3D O $7, $8 O $7, $4 O $4, $7 $8, $7
Which of the following statements regarding a profit-maximising monopolist is FALSE? O a. This firm might respond to a fall in demand by reducing both its output and its price. O b. This firm might respond to a fall in demand by reducing its output and increasing its price. O c. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price. d. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.