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Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
16th Edition
ISBN: 9781305648210
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel; David A. Macpherson
Publisher: Cengage Archive
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Chapter 11, Problem 3CQ
To determine
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Why don’t monopolists try to establish the highest price possible, as many people allege? What would happen to sales? To profits?
What stops oligopolists from acting together as a monopolist and earning the highest possible level of profits? Is there a way for oligopolists to attempt to cooperate and maximize profits? What are the risks of such attempts (and ultimately, generally cause such attempts to fail)?
for a monopolistic firm, its demands is p=200-
0.25Q while MR =200-0.5Q if its MC=20 how
much it should produce to maximize its profit?
for a monopolistic firm, its demands is p=200-
0.25Q while MR =200-0.5Q if its MC=20 how
much the firm should charge?
for a monopolistic firm, its demands is p=200-
0.25Q while MR =200-0.5Q if its MC=20 calculate
its maximizing profit
Chapter 11 Solutions
Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
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- Does a monopolist have a supply curve? Explain your answer. What are the different types of price discrimination? Differentiate between an oligopoly and a monopolistic competition (i.e. number of firms and the degree of product differentiation). How are skilled and unskilled workers in an economy likely to be affected if the firms adopt skill-biased technologies?arrow_forwardWhy are monopolies for the most part illegal?arrow_forwardWhen oil prices increased 10 fold during the 1973 – 80 energy crisis, many oil companies made huge profits. During this energy crisis, Congress considered imposing an “excess profits” tax on oil companies. If you were in Congress, would you vote for such a tax? Do unexpected monopolistic profits serve any useful function in a market economy?arrow_forward
- Consider a monopolistic business. What sort of demand curve does a monopolist face in contrast to a corporation that is fully competitive? What effects does the monopolist demand curve have on how prices and quantities are set?arrow_forwardScenario Use the following information to answer questions 16-19. The graph below shows the market demand for computers in a small country. To develop a domestic computer industry, the government prohibits imports of computers and gives a single local firm the sole right to produce and sell computers (that is, it is a legal monopoly). The demand curve shows the local demand for computers. The cost curves show the marginal cost (MC) and average total cost (ATC) of the single producer. The graph also shows the marginal revenue (MR) curve faced by this firm. Price per computer (Dollars) $3500 $3000 $2500 $2000 $1500 $1000 $500 0 MR MC.. ATC Demand 10 20 30 40 50 60 70 Quantity of computers (number per year)arrow_forwardWhat stops oligopolists from acting together as a monopolist and earning the highest possible level of profits? Offer two obstacles to oligopolists cooperating.arrow_forward
- How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive firm?arrow_forwardWhat are ways in which a monopolist can engage in price discrimination?arrow_forwardwhy do perfectly competitive firms maximize their profits by producing so that the price is equal to marginal cost, but monopolists maximize their profits by setting a price that is greater than marginal cost?arrow_forward
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