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 9DQ
To determine
Natural monopoly and price decision.
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Students have asked these similar questions
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?
Table 15-20
A monopolist faces the following demand curve:
Quantity Price
0
$30
1
$27
2
3
+
$24
$21
$18
5
$15
6
7
8
0
$12
$9
$6
$3
10
$0
Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm
produce in order to maximize profit?
O2 units
3 units
4 units
5 units
A monopolist has variable costs of VC =
q² and no fixed costs and faces a demand
curve of P = 24 - q, where P is price and
q the quantity sold. What is the
monopolist's profit?
072
O 64
None of the other answers is correct.
O 48
O 36
Chapter 12 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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Similar questions
- 4arrow_forwardSuppose that a monopolist faces linear demand given by Q(p)=90-3"p The monopolist also pays a marginal cost of $2 for each unit produced. What is the price that the monopolist will set to maximize its profits? O 16.5 O 15 O 16 O 15.5arrow_forwardAn industry with only one producer has a demand curve of P = 90-Q, with price in dollars and quantity in thousands. The monopolist's marginal cost curve is MC = 30 + 2Q. What is the deadweight loss of monopoly in this industry? O $100,000 O $37,500 O $72,667 $50,000arrow_forward
- The figure on the right shows the demand schedule for a product produced by a single-price monopolist. Price ($) 9 8 0000 7 6 5 4 3 C. 5th unit Quantity demanded What is the lowest level of output at which marginal revenue becomes negative? OA. 6th unit OB. 9th unit D. 7th unit OE. 8th unit 5 6 7 8 9 10 11 Price ($) 141 222 =26=LO 13- 12- 11- 10- 9- 8- 4- 2- 1- 45 6 7 8 9 10 11 12 13 14 15 16 Quantity Earrow_forwardQuestion 17 3아- MC ATC 26 27 26 25 24 AVC 20 MR 100 190 260 300 400 What is the optimal output and price for the prafit maximizing, nondiscriminating monopolist in the exhibit above? O 190 and $30 O 190 and $26 O 190 and $25 O 260 and $28 O 300 and $27 D Question 18 $/9 30- MC ATC 28 27 AVC 26 25 24 D. 2아 MR 100 190 260 300 400 Total cost for this nondiscriminating monopolist at its profit-maximizing output level in the exhibit above is O $7280 O $4750 $5700 None of the choices are correct O $4940 D Question 19 Why is collusian to raise prices highly unlikely among firms in perfectly competitive industries? O All the firms in competitive industries love their consumers too much to ever collude against them O There is only one firm in perfectly competitive industries, so whom would they collude with? • There are too many firms in perfectly competitive industries. O The products are too differentiated for collusion in perfectly competitive industries 3 This is a trick question because…arrow_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_forward
- Suppose that a monopolist faces linear demand given by Q(p)=1000-10p The monopolist also pays a marginal cost of $5 for each unit produced. What is the optimal price that the monopolist will charge to maximize its profits? O47.5 50 500 52.5arrow_forwardwhat is the efficiency (or deadweight) loss due to monopoly control of the industry?arrow_forwardExhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 90 1 $20 20 80 $20 48 70 3 $20 78 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 4 units, the monopolist earns a total profits of about O $118.00 O $112.00 O $110.00 O$120.00 2.arrow_forward
- Figure 15-6 Price Marginal Cost $20 15 10 Demand 100 150 200 Quantity Marginal Revenue Refer to Figure 15-6. To maximize its profit, a monopolist would • choose which of the following outcomes? O100 units of output and a price of $20 per unit 200 units of output and a price of $20 per unit 150 units of output and a price of $15 per unit 100 units of output and a price of $10 per unit « Previous Nextarrow_forwardA monopolist has variable costs of VC = q² and faces a demand curve of P = 24 - q, where P is price and q the quantity sold. What is the deadweight loss if the monopolist engages in first-degree price discrimination? O $64 O $16 O $6 O $32 O $0arrow_forward500 450 400 出350 300 250 是 200 150 LRAC 100 MC 50 MR 3 4 Quantity (hundreds of trips per month) If a marginal cost pricing rule is imposed on the single-price natural monopoly in the figure above, then the deadweight loss will be per month. If a marginal cost pricing rule is imposed on the single-price natural monopoly in the figure above, then the deadweight loss will be per month. $20,000 O so $40,000 O$80,000 $45,000 $5,000 Price and costs (dollars per trip)arrow_forward
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