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- Why is monopoly considered as a price maker?What is the quantity that maximizes social surplus? Explain. How much worse off is society as a result of this industry being monopolized? Show this on a graph and calculate the amount. Info needed in image belowWhy are monopolies for the most part illegal?
- One company has monopolized the market for cell phones. How does this impact the overall market for cell phones?Question 5: Jimmy has a room that overlooks, from some distance, a major league baseball stadium. He decides to rent a telescope for $50 a week and charge his friends and classmates to use it to peep at the game for 30 seconds. He can act as a monopolist for renting out "peeps". For each person who takes a 30 second peep, it costs Jimmy $.20 to clean the eyepiece. Jimmy believes he has the following demand for his service: Price of a Peep $1.20 Quantity of peeps demanded 1.00 90 100 150 200 250 300 70 60 50 350 40 30 400 450 20 10 500 550 a) For each price, calculate the total revenue from selling peeps and themarginal revenue per peep. Price Quantity TR MR $1.20 100 90 100 150 200 70 250 60 300 350 50 40 30 400 450 20 500 10 550 b) At what quantity will Jimmy's profit be maximized? What price will he charge? What will his total profit be? c) Jimmy's landlady complains about all the visitors coming into the building and tells Jimmy to stop selling peeps. Jimmy discovers, though, if he…What is a monopoly? Why do we not think monopolies are good in economics, even if they are very profitable? Can you give an example of a monopoly?