Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 1TY
To determine
Pure monopolies.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which one of the following is the best description of a monopolist? a.a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry b.a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Wisconsin c.a firm that is large relative to its competitors d.a firm that produces a single product
Which of the following in your view , is the BEST example of a NATURAL monopoly . Note some of these may not even be natural monopolies.
a.The production of electricity
b.delivering packages (UPS and similar companies)
c.The monopoly Microsoft holds in the operating system market
d.The delivery of electricity to homes.
Which of the following is likely a monopoly?
a.All other answers are correct
b. The Beatles (in being able to legally produce Beatles cds)
c.A grocery store in a small town that has only 2 stores. It is a snowy and cold day , and the stores are located in opposites sides of the town. Driving to the other side to buy at the other store is then dangerous and uncomfortable.
d.Microsoft - in the operating system market
Which one ??
Knowledge Booster
Similar questions
- explain why you agree or disagree with the following statements: a. "all monopolies are created by the government" b "the monopolist charges the highest possible price" c. "the monopolist never take a loss"arrow_forwardAnswer in step by step with explanation. Don't use Ai.arrow_forwardWhich two kinds of monopolies exist? Which is more economically efficient? Why?arrow_forward
- Match each of the terms to their description: Shutdown Point A. something that keeps new firms from joining a market B. legal protection for inventions C. legal protection for books and music D. a firm that operates as a monopolist Price maker Barriers to Entry Copyright E. revenues do not cover its average variable costs Patentarrow_forwardUse the graph to answer the following 5 questions. A single priced unregulated monopolist faces the demand curve and has the cost curves illustrated in the diagram below. 1. What is the profit Price maximizing quantity of output? 70 a) 25 units. b) 40 units. c) 50 units. d) 60 units. 60 e) 70 units. f) 80 units g) 90 units Marginal Cost 50 2. What price does this monopolist charge? a) $58 b) $20 40 Average Total Cost c) $35 d) $30 e) $45. f) $50 30 g) $40 h) $38 3. What are the total profits? a) $1200 b) $0 c) $1250 d) $200 e) $250. f) $2250. g) $150 h) $1600 20 10 Demand 20 40 60 80 100 120 140 160 Quantityarrow_forwardPlease submit the answer and then watch the video feedback.Tony's Tree Service is the only firm in a town that removes large trees. Tony invested in costly bucket trucks and wood chippers when he began his business. Which of the following best describes the barrier to entry that allows Tony to keep his monopoly? a.monopoly resources b.government-created monopoly c.natural monopolyarrow_forward
- Suppose there are 5 types of consumers: Type A. Type B. Type C. Type D, and Type E. There are 2,000 of each type. Two software products are sold by a monopolist: spreadsheets and word processing. Assume the marginal cost of producing each program is $25. Consumer Type A B с D E Number 2,000 2,000 2,000 2,000 2,000 Spreadsheet 200 75 50 25 0 b. What is profit under this pricing policy? Willingness to Pay Word Processor Instructions: Round your answers to the nearest whole number. a. What will be the profit-maximizing bundle price? 0 25 50 75 200 Both 200 100 100 100 200 c. How will profit from this pricing policy compare to profit under independent pricing of the two goods? When pricing independently, the profit-maximizing price for spreadsheets is $ processing is $ d. What is profit under independent pricing? and the profit-maximizing price for word e. Now consider the possibility of offering a bundle and selling the two programs separately. Can you find prices for the bundle and the…arrow_forwardIs the insulin market considered as a monopoly? How and Why?arrow_forwardMany firms that sell in small markets are effectively monopolies; they are the sole provider of a good in their geographic area. Most of these firms earn positive economic profits, yet they are allowed to operate as monopolies without regulation by government. Why?arrow_forward
- Market Structure a. In the short run, if a perfectly competitive firm produced at the quantity of productive efficiency, would it generate the highest profit level possible? Why or why not? b. Draw a graph to represent a natural monopoly and describe the circumstances that would permit natural monopoly to exist. Would it be wise for government to break up natural monopolies? Give some examples of natural monopoliesarrow_forwardMonopoly The graph below illustrates a monopolist's demand, MR, and cost curves. a. What quantity will the monopoly produce and what price will the monopoly charge? What will its profits be? b. Suppose the monopoly is regulated. If the regulatory wants to achieve economic efficiency, what price should it require the monopoly to charge? How much output will the monopoly produce at this price? What will its profits be? Price and cost (per necklace) 260.00 240.00 220.00 200.00 180.00 160.00 140.00 120.00 100.00- 80.00 60.00 40.00 20.00- 0.00+ 0 MC ATC MR D 8 10 12 14 16 18 20 22 24 26 Quantity (diamond necklaces)arrow_forwardIf you lived in a small rural community in Montana, which of the following is most likely to be a monopoly ? A. an appliance store B. a grocery store C. a dentists office D. An electricity providerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning