The output adjustment under monopoly for increasing profit.

Question

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Answer 1

Question

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

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Answer 2

Question

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

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Answer 3

Question

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

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Answer 4

Question

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

Answer 6

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

Answer 7

Chapter 10, Problem 1RQ

To determine

The output adjustment under monopoly for increasing profit.

Answer 8

Expert Solution & Answer

Explanation of Solution

The monopoly is a market structure where there is only one seller selling the unique product and the seller faces the downward sloping demand curve. The monopolist would always try to maximize the economic profit from the market. The profit maximizing level of monopolist output is obtained at the point where the marginal revenue of the monopolist equals with the marginal cost of the monopolist. When the marginal cost of producing the output is lower than the marginal revenue, the monopolist can further increase the output and increase the profit until it reaches the point where marginal revenue and cost are equal with each other.

When the marginal revenue is lower than the marginal cost of production, the revenue of the monopolist is less than the cost. Thus, the higher cost becomes an economic loss for the monopolist. Thus, at this point of economic loss, the firm should stop producing the output and it should revert back to the level where the marginal cost of production is equal to the marginal revenue. Thus, the profit of the monopolist would be maximized. The profit maximizing output can be illustrated as follows:

Microeconomics (9th Edition) (Pearson Series in Economics), Chapter 10, Problem 1RQ

Here, in the figure, the initial level of production is at the price P' and quantity Q'. Here, the marginal cost of production is higher than the marginal revenue of the monopolist, which means the production incurs loss for the monopolist. Thus, the monopolist should decrease his production to the point where the marginal revenue equals the marginal cost. This is obtained at the point where the quantity is Q* and the price is P* in order to avoid the economic loss to maximize the economic profit of the monopolist.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there is only one seller selling the commodity. There will be very strong barriers to entry into the market.

Answer 12

Ch. 10 - Prob. 1RQ Ch. 10 - Prob. 2RQ Ch. 10 - Prob. 3RQ Ch. 10 - Prob. 4RQ Ch. 10 - Prob. 5RQ Ch. 10 - Prob. 6RQ Ch. 10 - Prob. 7RQ Ch. 10 - Prob. 8RQ Ch. 10 - Prob. 9RQ Ch. 10 - Prob. 10RQ

The output adjustment under monopoly for increasing profit.

The output adjustment under monopoly for increasing profit.

Explanation of Solution

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