Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 13, Problem 2.1P
(a)
To determine
The statements for price and marginal revenue.
(b)
To determine
Pricing in a
(c)
To determine
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**YOU ONLY HAVE TO ANSWER QUESTION H**
Hi. I have this question for an assignment, I think someone doing an example step by step would be extremely helpful. So, if someone could pick whatever demand function they want and answer the following questions, that would be greatly appreciated.a) If the MC is $8/unit, find the equilibrium price and quantity under perfect competition and Monopoly.
b) If the government places a tax of $2/unit on production in each case, find the new price and quantity under perfect competition and Monopoly.
c) Comment on the incidence of the tax in each case.
Suppose a monopoly's price elasticity of demand equals -2 and the marginal cost of production equals $400.00.
The profit-maximizing price is $ - (Enter a numeric response using a real number rounded to two decimal places.)
What will be the firm's markup?
When maximizing profit, the monopoly's markup is percent. (Round your response to the nearest percent.)
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Chapter 13 Solutions
Principles of Economics (12th Edition)
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- Draw the graph. If the monopoly is a doing perfect price discrimination, then: 1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.arrow_forwardHow do I figure out the second part?arrow_forwardThe table below shows cost data for producing different amounts of cleaning products. Suppose this market is a monopoly. Use the information in the table to find the output where the monopoly would maximize profit. Price ($) Quantity Total Revenue ($) Total Cost ($) 150 0 0 100 120 5 600 180 100 10 1000 400 90 15 1350 675 80 20 1600 1120 70 25 1750 1750 Profit maximizing quantity: What is the profit the monopoly achieved? $arrow_forward
- Draw the graph. If the monopoly is a single price monopoly (usual monopoly, as in chapter 10), then: the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?) the monopoly charges a price of P = ________ the consumer surplus is CS = ______ (identify the area on the graph and calculate it). the producer surplus is PS = _________(identify the area on the graph and calculate it). the deadweight loss of the monopoly (as compared to the perfect competition) is DWL = ______ (identify the area on the graph and calculate it).arrow_forwardSuppose a monopoly has a cost curve equal to C=6400 + 100Q. The firm's demand curve is p= 500 - 4Q. (Round all numeric responses to two decimal places) What is the monopoly's unregulated profit-maximizing quantity? los tv 13 DII F9 F6 F7 esc F4 F5 %23 $4 & ! 3 4 7 Q W IT Y U tab A S G K caps lock C V shift fn control option commandarrow_forwardHot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $40 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. CH Price (dollars per ride) 150 140 130 120 110 100 Quantity (rides per month) 0 1 2345 Total cost (dollars per month) 50 175 310 455 610 775arrow_forward
- Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. C Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 G A WNIO 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750arrow_forwardConsider the local telephone company, a natural monopoly. The following graph shows the demand curve for phone services, the company's marginal revenue curve (labeled MR), its marginal cost curve (labeled MC), and its average total cost curve (labeled AC). (Hint: Click a point on the graph to see its exact coordinates.) PRICE (Dollars per month) 160 140 120 100 80 60 40 20 0 0 1 MR 2 3 4 567 QUANTITY (Thousands of households per month) AC MC D 8 (?)arrow_forwardA Quick Review of Perfect Competition and Monopoly Figure 39.1 Graphs of Monopoly and Perfect Competition Monopoly Perfect Competition R MC ATC MC ATC AVC K D= MR (G .M. H. MR E LM QUANTITY A B D QUANTITY These questions are based on Figure 39.1. Underline the correct answer. Assume that the monopoly can set only one price. Both the monopoly and the perfect competitor seek to maximize profits. 1. A monopoly firm will maximize profits at what price? (B) OB (A) OA (C) OC (D) OR 2. Economic profits for the monopoly firm are represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJN 3. Total costs for the monopoly firm are represented by the area of which rectangle? (A) BKLO (B) CGEO (C) AJEO (D) BHEO 4. The total revenue for the monopoly firm is represented by the area of which rectangle? (C) AJHB (A) OCGE (B) OAJE (D) BAJH 5. The perfect competitor will maximize profits at what output level? (в) ов (A) OA (C) 0G (D) OD COSTS/REVENUE (DOLLARS) ------- COSTS/REVENUE…arrow_forward
- **You only need to answer Question C*arrow_forwardThe graph shows cost and revenue curves for producing different amounts of chairs. Suppose the market for chairs in this example is a monopoly. On the graph, suppose that: A-$37, B-$15, C-$12, D=30 and E-43. Price B I D MR 1 E MC D Quantity How much revenue will the monopolist firm generate?arrow_forwardConsider a monopoly firm producing laptops. Below are the equations describing this firm's economic conditions. Demand: Q = 10 – P Marginal Revenue: MR= 10 – 2Q Total Cost: TC = 4 + Q + 0.5Q² || Marginal Cost: MC=1+Q Choose all correct statements. The produced quantity is 3. В. The price charged is 6. n C. The profit this monopoly firm can make is 9.5. D. None of above is correct.arrow_forward
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