The effects of changes in technology.

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Answer 1

Question

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

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The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 8 MC ATC MR 30 D 45 50 Quantity/time The firm will maximize its profit at a quantity of units. After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is S The maximum profit the firm can earn in this situation is $ per unit for this output. How will the situation change over time? Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. ◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. This market is already in long-run equilibrium, and will not…

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Answer 2

Question

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

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Answer 3

Question

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

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Answer 4

Question

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

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Answer 5

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

Answer 6

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

Answer 7

Chapter 14, Problem 1DQ

To determine

The effects of changes in technology.

Answer 8

Expert Solution & Answer

Explanation of Solution

An increase in the number of customers of the electronic and telephone companies would increase the use of their services and this would reduce the average cost of these companies. A large part of the costs associated with these companies is fixed. Thus, adding a second or third distribution service would be wasteful, which also covers the same route as the first. Therefore, it is better to serve these services by a single agency. A monopoly can serve the public interest, provided that the firm does not exploit its customers using market power. A technological change can alter the cost structure and efficiency of an industry. A technological change may be able to provide the same service at a lower cost, which would eliminate a natural monopoly. The impact of small satellite TV dishes on cable TV networks is an example of the effect of technological changes.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 14 - Prob. 1DQ Ch. 14 - Prob. 2DQ Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Prob. 5DQ Ch. 14 - Prob. 6DQ Ch. 14 - Prob. 7DQ Ch. 14 - Prob. 8DQ Ch. 14 - Prob. 9DQ Ch. 14 - Prob. 10DQ

The effects of changes in technology.

The effects of changes in technology.

Explanation of Solution

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