The accompanying diagram shows demand and long-run cost conditions in an industry.PriceРОa aP1P2MCIIQ0LRATCMR LLQ1Q2OutputD? Without regulation, a monopolist would produceunits of output and charge a price ofSuppose regulators impose a marginal cost pricing policy on this monopolist.Under this regulation, the monopolist would charge a price ofeconomic profit.Suppose regulators impose an average cost pricing policy on this monopolist.Under this regulation, the monopolist would charge a price ofeconomic profit.O TrueO Falseand produceand produceTrue or False: Under average cost pricing, firms have little incentive to keep costs down.units. In such a case, the monopolist would earnunits. In such a case, the monopolist would earn

The monopoly refers to the market structure where only single firm exists in the market. The single…

Without regulation, a monopolist would produce units of output and charge a price of Suppose regulators impose a marginal cost pricing policy on this monopolist. Under this regulation, the monopolist would charge a price of economic profit. and produce Suppose regulators impose an average cost pricing policy on this monopolist. Under this regulation, the monopolist would charge a price of economic profit. and produce True or False: Under average cost pricing, firms have little incentive to keep costs down. O True O False units. In such a case, the monopolist would earn units. In such a case, the monopolist would earn

Without regulation, a monopolist would produce units of output and charge a price of Suppose regulators impose a marginal cost pricing policy on this monopolist. Under this regulation, the monopolist would charge a price of economic profit. and produce Suppose regulators impose an average cost pricing policy on this monopolist. Under this regulation, the monopolist would charge a price of economic profit. and produce True or False: Under average cost pricing, firms have little incentive to keep costs down. O True O False units. In such a case, the monopolist would earn units. In such a case, the monopolist would earn

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Using illustration differentiate the behavior of a monopolist that aims at maximizing profit and a monopolist that aims at maximizing revenue
1. Refer to the figure below when the firm is a monopolist. Price P MC L K J ATC D T W Quaxtity \MR a) If the monopolist maximizes profit, how many units will it produce? b) What price will the monopolist charge? c) What area measure the monopolist's profit? d) What level of output would be socially efficient? 2. A Monopolist is facing a demand schedule that is shown in the following table. Quantity Total Revenue Average Revenue Marginal Revenue Price $35 $32 1 2 3 $29 14 $26 15 $23 $20 $17 $14 6 7 18 19 $11 10 $8 a) Fill out the rest of the table. b) Assume this monopolist's marginal cost is constant at $11. What quantity of output (Q) will it produce and what price (P) will it charge? ------
Suppose a monopolist sells a product to faculty members and students on the campus. If the firm sets a single price, the monopolist produces 5000 units and sell them at the price of $3 per unit. At this price, the price elasticity of demand for faculty member is -2.5. And the price elasticity of demand for students is -1.5. The monopolist is considering whether she should set different prices for the faculty members and students and asks for your advice. The monopolist is thinking about charging faculty members a 10% higher price. The quantity demanded by the faculty members would fall by %. The monopolist is thinking about charging students a 10% higher price. The quantity demanded by the students would fall by %. Who should the monopolist charge more? mention faculty and students and how much
3
Suppose that a monopolist’s demand curve is given by P(y) = 28−3y and its marginal cost is given by MC(y) = y, where y denotes output.a. Find the profit-maximizing quantity and price for this monopolist. Illustrate your answer with a graph.b. Calculate the consumer surplus, producer surplus and thedeadweight loss of this monopoly. (You may find it helpful to refer tothe graph you drew for part a.)c. Carefully explain why a monopoly creates a deadweight loss.
The graph depicts the market for cable where there is one natural monopoly; AC represents average (total) cost, D represents market demand, and MR represents marginal revenue. Assume that the marginal cost is equal to 0. Suppose that before the cable company lays any cable, the government decides to regulate the monopoly by setting the price. What is the lowest price that regulators can impose while ensuring that the cable company enters the market? 2 What will a monopolist charge in the absence of any regulation? 4 Price $10 9 8 7 6 5 4- 3- تیا 2 1 0 1 AC 2 MR نیا D 4 5 6 7 8 9 10 Households (in millions)
What quantity will the above monopolist produce if it can first degree price discriminate? (Enter a number) How much consumer surplus do consumers get in the above graph if the monopolist first degree price discriminates? (Enter a number) If the monopolist first degree price discriminates, will the quantity produced by the monopolist be allocatively efficient? (Enter: YES or NO)
Price Quantity $10 5 $9 10 16 $8 $7 $6 23 31 $5 45 52 $4 $3 60 A monopolist faces the demand schedule above. If the monopolist faces a constant marginal cost of $6, how much output should the monopolist produce in order to maximize profit? 10 units and it should charge a price of $8 16 units and it should charge a price of $6 16 units and it should charge a price of $8 10 units and it should charge a price of $9
. Let the demand curve for a monopolist’s product be P = 100 – 2Qd and the marginal cost of production be constant at MC = 10. Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of P1 = $70 and the second block provides an additional 15 units at a price of P2 = $40. How much does the monopolist’s profit rise with this scheme?
NEED ASAP
A monopolist has the following information: (use this to answer questions 8-10) Demand: P = 100 - .1Q AC = MC= 10 MR = 100 - .2Q at the profit maximizing level of output, economic profit is: O 20,150 20,250 20,350 20,450
The diagram at right shows the demand curve, marginal revenue curve, and cost curves for a single-price monopolist that owns the only golf courses on Eagle Island. The monopolist's product is 18-hole golf games. a. Now suppose the monopolist is able to charge a different price on each different unit sold. What would be the total number of rounds of golf sold per week? rounds. (Round your response to the The total number of rounds sold per week is 600 nearest whole number) What would be the price on the last round sold? The price on the last round sold is $200 (Round your response to the nearest dollar) b. What is the value of the consumer surplus if the monopolist cannot price discriminate at all? The value of the consumer surplus is $ 40000 (Round your response to the nearest dollar) c. What is the value of the consumer surplus when the monopolist is practicing this "perfect price discrimination? The value of the consumer surplus is $ (Round your response to the nearest dollar) Price…