Monopoly of services and the availability of substitutes.

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Answer 1

Question

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

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Answer 3

Question

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

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Answer 4

Question

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

Answer 6

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

Answer 7

Chapter 13, Problem 1SPA

To determine

Monopoly of services and the availability of substitutes.

Answer 8

Expert Solution & Answer

Explanation of Solution

The monopoly market is a single seller market where the output and price decisions are taken by the seller. As a result, the monopoly market grants the market control to the monopolist. This monopoly arises when there are no close substitutes for a good or services are available in the market for the goods and services. There will be strict barriers that restrict the entry into the market by the new firms thatprevent the competition in the market.

While looking at the postal services, the ordinary and non-urgent mails are not much profitable and since no private firms would encourage and participate in the market for such mails. But the urgent mail services are costly and profitable which is the reason why there are many express mail services operating in the economy. The fax services as well as the email services are the close substitutes available for the service. When the case of the medicine is considered, there are many generic as well as products of various firms that help to control and reduce cholesterol as the LIPITOR does which means there are some substitutes available in the market. There are many satellite television as well as internet television services available as the substitutes for the Cox communications.

While looking at the protection that these services enjoys, it can be easily identified that the postal service is owned and operated by the state, which means there will be legal barriers to entry into the market for the others even though the non-urgent mails become profitable. In the case of the LIPITOR, the competitors can make similar medicines for controlling cholesterol but cannot make the LIPITOR due to the patent rights that the firm might own after developing the medicine. The case with the cable service is different that the locality might be small enough such that its demand is completely met by the Cox itself at the lowest possible cost, which makes Cox the natural monopolist. There are chances that the Cox enjoys some legal barriers that prevent the competition.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Monopoly: The monopoly is a market structure where there are no close substitutes available for the product of a commodity. This grants the complete market control to the seller.

Answer 12

Ch. 13.1 - Prob. 1RQ Ch. 13.1 - Prob. 2RQ Ch. 13.1 - Prob. 3RQ Ch. 13.2 - Prob. 1RQ Ch. 13.2 - Prob. 2RQ Ch. 13.2 - Prob. 3RQ Ch. 13.2 - Prob. 4RQ Ch. 13.3 - Prob. 1RQ Ch. 13.3 - Prob. 2RQ Ch. 13.3 - Prob. 3RQ

Monopoly of services and the availability of substitutes.

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Monopoly of services and the availability of substitutes.

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