EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 10, Problem 8SP
To determine
Explain the
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An unregulated natural monopoly bottles Mt. McKinley air, unique clean air that has no substitutes. The
monopoly's total fixed cost is $30,000 a year and its marginal cost is 10 cents a can.
The graph illustrates the demand for Mt. McKinley air.
Draw the average total cost curve. Plot the four control points at the quantities 100,000, 200,000,
300,000, and 400,000. Label the curve.
Draw a point at the new quantity and price if the regulator sets a price cap such that the monopoly
breaks even.
The number of cans produced
sold
its marginal cost.
A. is; benefit; exceeds
B. is not; benefit; exceeds
OC. is not; revenue; is greater than
D. is; revenue; equals
the efficient quantity because the marginal
from the last can
60-
50-
40-
30-
20 20
10-
Price (cents per can)
0-
ATC
MC
D
$300
100
200 300 400
Quantity (thousands of cans per year)
>>> Draw only the objects specified in the question.
500
The graph below shows the Market conditions of Honey’s Laundry service, which is the only laundry in Arizon Residential Area. Considering the shop as a Monopoly market, answer the following questions:
(a)In order to maximize profit, how many clothes does the shop clean?[Answer in numerical value only without any unit]
(b)If the opening of five new laundries turns it into a perfectly competitive market, what should be the price Sunny’s laundry be charging now?[Answer in numerical value only without any unit]
(c)Compute the change in total revenue between part a and part b.[Answer in numerical value only without any unit]
Note: Bartleby does not accept more than 3 sub-parts, and here are no more than 3. Please solve all parts to get a 'like'. Thanks
Blue INK is the only cabel service provider in Gazipur. The diagram below depicts the price, output and costs incurred by Blue INK. Use the graph to answer the following questions:
1. What is the Total revenue generated by Blue INK at the profit maximizing level of output?
2. If the Cable Service Market turns into a Perfectly Competitive Market, what will be the total ammount of the service provided?
3. If the market turns into a Monopoly market again, what will be the total deadweight loss created?
Chapter 10 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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