Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 4RQ
To determine
Perfect competitive firms and price discrimination .
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Students have asked these similar questions
1.
The table below represents the demand for Widgets, Inc., which has a
monopoly in the sale of widgets. Calculate total revenue and marginal
revenue for the levels of output given. Draw the demand curve and the
marginal revenue curve in a same graph.
Quantity
0
1
2
3
4
LO
5
Price
$25
21
17
13
9
LO
5
Suppose that the paper clip industry is perfectly competitive. Also assume that the market price for paper clips is 2 cents per paper clip. The demand curve faced by each firm in the industry is: LO10.3 a. A horizontal line at 2 cents per paper clip. b. A vertical line at 2 cents per paper clip. c. The same as the market demand curve for paper clips. d. Always higher than the firm’s MC curve.
1. At what output rate and price does the monopolist operate?
2. In equilibrium, approximately what is the firm’s total cost and total revenue?
3. What is the firm’s economic profit or loss in equilibrium?
Chapter 12 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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- 44)arrow_forwardWhich of the following statements regarding a profit-maximising monopolist is FALSE? O a. This firm might respond to a fall in demand by reducing both its output and its price. O b. This firm might respond to a fall in demand by reducing its output and increasing its price. O c. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price. d. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- 7. Is monopolistic competition efficient? Suppose that a company operates in the monopolistically competitive market for rugby kits. The following graph shows the demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve for the firm. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost. PRICE (Dolars per 3822ESRR 2 100 70 20 0 MO 6 19 20 ATC MR 30 AS 50 40 70 QUANTITY (Thousands of kits); Demand 8 100 Mon Comp Outcome Min Unit Cost Carrow_forwardA local magic shop has a monopoly on the production of magic wands. Each customer wants only one magic wand, and the table below shows each customer's willingness to pay. The marginal cost of producing a wand is $21 no matter how many are produced. Quantity demanded Price per wand ($) LO 01 2 3 4 5 6 78 30 27 24 21 18 15 12 96 If the shop can charge only a single price, it will charge $ wands. If the firm practices perfect price discrimination, it will sell a total of earn a profit of $| and sell wands andarrow_forward7. Refer to Figure 16-2. Which letter identifies the profit-maximizing level of output for this firm? 8. Refer to Figure 16-2. Which letter identifies the efficient level of output for this firm?arrow_forward
- 25arrow_forwardWhich of the following statements about the firm depicted in the diagram is true? O A. The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises. O B. The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits. OC. The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises. O D. The fact that this firm is a natural monopoly is shown by the long-run average total cost curve still falling when it crosses the demand curve. Price and cost per unit 905 70 59 35 20 0 MA 580 835 1,740 1,900 2,204 MC Demand ATC Quantityarrow_forwardQuestion 43 Answer questions 43, 44, 45, & 46 according to the Last Word entitled "Higher Wages...": Restaurants are monopolistically competitive as compared to oilgopolies which are purely competitive. True O False Question 44 There are more capital goods used in small local restaurants & more labor used in national restaurant chains. True Falsearrow_forward
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