Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 13, Problem 4SQ
To determine
The renting of telephones and providing of service.
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Canada Post has a monopoly on residential mail delivery.
Pfizer Inc. makes Lipitor, a prescription drug that lowers cholesterol.
Rogers Communications is the sole provider of cable television service in some parts of Ontario.
Are any of these firms protected by a barrier to entry?
Do any of these firms produce a good or service that has a substitute?
Might any of them be able to profit from price discrimination?
.....
Rogers Communications has a
of other cable companies into the market because Rogers Communications
barrier to entry regarding the entry
O A. natural; was the first firm to offer cable television in parts of San
Diego
O B. legal; reaps economies of scope allowing it.ko provide cable
television service as well as Internet service
O C. legal; has a government licence to provide cable television in parts
of San Diego
OD. natural; reaps economies of scale allowing it to provide cable
television service at a lower average cost than two or more firms
...
ssume there is no price discrimination:
Matthew, Rachel, Janice, and Mandy own the only ice company in town (they have a monopoly on the ice market). Matthew wants to sell as much ice as possible without losing money. Rachel wants the ice company to bring in as much revenue as possible. Janice wants to maximize total surplus and Many wants to make the largest possible profit. Use ONE clearly-labelled graph of the ice company’s marginal revenue, demand, and cost curves to show the price and quantity (i.e., ice) each person desires. Provide explanation.
Is it possible to have a situation where a profit maximizing monopoly chooses to produce the same quantity as the one that would be produced under perfect competition:
a) Yes, the monopoly always chooses to produce the same quantity as the one that wouldbe produced under perfect competitionb) Yes, under first-degree price discriminationc) Yes, under second-degree price discriminationd) Yes, under third-degree price discriminatione) None of the above
Chapter 13 Solutions
Micro Economics For Today
Ch. 13.2 - Prob. 1YTECh. 13.6 - Prob. 1.1YTECh. 13.6 - Prob. 1.2YTECh. 13 - Prob. 1SQPCh. 13 - Prob. 2SQPCh. 13 - Prob. 3SQPCh. 13 - Prob. 4SQPCh. 13 - Prob. 5SQPCh. 13 - Prob. 6SQPCh. 13 - Prob. 7SQP
Ch. 13 - Prob. 8SQPCh. 13 - Prob. 9SQPCh. 13 - Prob. 10SQPCh. 13 - Prob. 11SQPCh. 13 - Prob. 12SQPCh. 13 - Prob. 1SQCh. 13 - Prob. 2SQCh. 13 - Prob. 3SQCh. 13 - Prob. 4SQCh. 13 - Prob. 5SQCh. 13 - Prob. 6SQCh. 13 - Prob. 7SQCh. 13 - Prob. 8SQCh. 13 - Prob. 9SQCh. 13 - Prob. 10SQCh. 13 - Prob. 11SQCh. 13 - Prob. 12SQCh. 13 - Prob. 13SQCh. 13 - Prob. 14SQCh. 13 - Prob. 15SQCh. 13 - Prob. 16SQCh. 13 - Prob. 17SQCh. 13 - Prob. 18SQCh. 13 - Prob. 19SQCh. 13 - Prob. 20SQ
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Similar questions
- Assume there is no price discrimination: Matthew, Rachel, Janice, and Mandy own the only ice company in town (they have a monopoly on the ice market). Matthew wants to sell as much ice as possible without losing money. Rachel wants the ice company to bring in as much revenue as possible. Janice wants to maximize total surplus and Many wants to make the largest possible profit. Use ONE clearly-labelled graph of the ice company’s marginal revenue, demand, and cost curves to show the price and quantity (i.e., ice) each person desires. Provide explanation.arrow_forwardSome years ago, two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market in this case was “the market for intercity bus service.” Another possible definition was “the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.” Which definition do you think the bus companies preferred, and why?arrow_forwarddo fast i will 5 upvotes.arrow_forward
- 1. Two companies, Klaren Electronics, a monopoly, and the Yarn Barn, a perfectly competitive firm, are interested in increasing their profits by using price discrimination. What is price discrimination? Will it help each company to accomplish their goal? Why or why not?arrow_forwardDon't provide handwritten solution... The figure below depicts the market demand curve a monopoly firm faces. If the monopoly firm successfully practices first-degree price discrimination, the firm's total revenue amounts to ________. $4,000 $10,000 $6,000 $5,000arrow_forwardif a natural monopolist practices perfect price disrimination, how does it affect the profit-maximizing level of output, consumer surplus, producer surplus, total surplus, and deadweight loss? explain with a diagram.arrow_forward
- How price discrimination occur in airline industry? Explain.arrow_forwardSuppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it has a fixed cost). 1.) Using the point drawing tool, indicate the monopoly's profit-maximizing price and quantity in the figure if it cannot price discriminate. Label this point' e,. '2.) Using the rectangle drawing tool, indicate the monopoly's losses at the no price discrimination profit-maximizing price and quantity. Label this rectangle 'Losses,. 3.) Using the point drawing tool, indicate the monopoly's profit-maximizing quantity in the figure if it perfectly price discriminates and the price charged for the last unit produced. Label this point' e2. '4.) Using the triangle drawing tool, indicate the monopoly's producer surplus with perfect price discrimination. Label this triangle PS, . ' Carefully follow the instructions above, and only draw the required objects. 2 Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost curve is…arrow_forward100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 $40 $20 $100 0 $60 2 4 MR Suppose that Vanessa who owns a Zumba fitness center in rural Indiana can identify her customers' demand. How much would she charge in order to achieve 1st degree (=perfect) price discrimination? MC ATC D 6 8 10 Quantity (clients per day)arrow_forward
- If a natural monopolist practices perfect price discrimination, how does it affect the profit-maximizing level of output, consumer surplus, producer surplus, total surplus, and deadweight loss? Explain with a diagram.arrow_forwardHersheypark in Pennsylvania mentions the following offer on its Web page: “A military discount is available at Hersheypark during the regular summer operating schedule off of the Regular, Junior and Senior One Day admission. This discount is available to active duty military, reserves, retired military personnel, and members of the National Guard.” This is _____ price discrimination.arrow_forwardExplain price discrimination. What are the conditions to make price discrimination effective? Provide your answers with examples from the Airline Industry.arrow_forward
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