Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 16, Problem 10IAPA
To determine
To show:
The graph with
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K
Big Top is the only circus in the nation. The graph shows its demand curve and marginal cost curve.
Draw the marginal revenue curve Label it
Draw a point at the firm's profit-maximizing output and price
Draw a shape to show the consumer surplus Label it CS
Draw a shape to show the producer surplus Label it PS
S
Consumer surplus equals and producer
surplus equals s
>>> Answer to 2 decimal places
When the firm maximizes profit, the circus is
OA. efficient, marginal revenue equals marginal cost
OB. inefficient, marginal benefit exceeds marginal revenue
OC. efficient, the marginal benefit from an additional ticket is greater than its marginal cost
OD. inefficient, the marginal benefit from an additional ticket is greater than its marginal cost
OE. inefficient, marginal revenue equals marginal cost
because
1
50-
45-
40
35
30-
25
20-
15-
10-
5+
0+
0
Price and cost (dollars per ticket)
D
MC
100 200 300 400 500 600 700 800 900
Quantity (tickets per show)
>>> Draw only the objects specified…
11
Please submit the answer and then watch the video feedback.Farmer Ted sells 1,000 bushels of wheat at a price of $5 per bushel in a competitive market. Wilma sells 5 gallons of water at a price of $5 per gallon in a monopoly market. If both Farmer Ted and Wilma want to sell a higher quantity, what happens to their respective prices?
a.Farmer Ted's price remains constant and Wilma's price decreases.
b.Farmer Ted's price decreases and Wilma's price remains constant.
c.Farmer Ted's price remains constant and Wilma's price increases.
d.Both Farmer Ted's and Wilma's prices decrease.
Chapter 16 Solutions
Foundations of Economics (8th Edition)
Ch. 16 - Prob. 1SPPACh. 16 - Prob. 2SPPACh. 16 - Prob. 3SPPACh. 16 - Prob. 4SPPACh. 16 - Prob. 5SPPACh. 16 - Prob. 6SPPACh. 16 - Prob. 7SPPACh. 16 - Prob. 8SPPACh. 16 - Prob. 9SPPACh. 16 - Prob. 10SPPA
Ch. 16 - Prob. 11SPPACh. 16 - Prob. 1IAPACh. 16 - Prob. 2IAPACh. 16 - Prob. 3IAPACh. 16 - Prob. 4IAPACh. 16 - Prob. 5IAPACh. 16 - Prob. 6IAPACh. 16 - Prob. 7IAPACh. 16 - Prob. 8IAPACh. 16 - Prob. 9IAPACh. 16 - Prob. 10IAPACh. 16 - Prob. 1MCQCh. 16 - Prob. 2MCQCh. 16 - Prob. 3MCQCh. 16 - Prob. 4MCQCh. 16 - Prob. 5MCQCh. 16 - Prob. 6MCQCh. 16 - Prob. 7MCQ
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- nd ID! But it is also so you can get some pr The diagram shows the market for Film circa 1925, when Kodak ruled the industry. Price of roll 50 40 30 20 10 0 MR D 1. What is the monopoly price of a roll of film? 2. What is the monopoly quantity of film sold? 3. What is the competitive price of a film roll? 4. What is the competitive quantity of film sold? 500 600 700 800 S 006 Quantity per day (thousands), rolls 1,000arrow_forwardQuestion 1: Revenue and costs MC $34 ATC 29 50 27 21 13 Demand MR 600 800 940 1160 Quantity Assume this is a monopoly. What is the market equilibrium output in this market? Question 2: Revenue and costs MC $34 ATC 29.50 27 21 13 Demand MR 600 800 940 1160 Quantity Assume the above graph is a monopoly. What is the deadweight loss if this firm maximizes profits? If there is no deadweight loss, put 0 in for your answer. Assume linearity.arrow_forwardLabel the graph.arrow_forward
- The following figure shows the demand curve for Good X in a perfectly competitive market. Later, the government grants one of the firms the exclusive right to manufacture and sell Good X. MR represents the marginal revenue curve of the firm when it operates as a monopoly. The marginal cost of producing Good X is constant at $5. Price/Cost (S) 4 Demand 3 MR 2 1 10 11 12 13 14 15 16 17 18 Quantity (1,000 units) a) What is the quantity supplied when the market is perfectly competitive? What happens to the quantity supplied once the market changes to a monopoly? b) What is the market price when the market is perfectly competitive? What is the market price when the market changes to a monopoly? c) Compare the consumer surplus when the market is perfectly competitive and when the market is a monopoly. Is there any producer surplus or deadweight loss in either case? If yes, then how much?arrow_forward. A. How the price of the frim is determined from industry price?B. Compare the Automobile industry and agriculture according to market structure. C Give two examples of each 1. Legal Monopoly 2. Economic Monopolyarrow_forwardThe accompanying graph depicts a hypothetical monopoly. Follow instuctions 1-3 below to identify the monopoly's profits 1. Place point E at the monopoly's profit maximizing price and quantity 2. Move the average total cost (ATC) curve to a position that depicts the monopoly earning a positive profit. 3. Place the area labeled Profit in the area of the graph that represents the monopoly's profit 10 MC Profit 7 ATC 4. 3 2 1 MR 0 4. 1 3 7 Quantity (millions of units) 10 LO et LO Price (S per unit)arrow_forward
- 1. The following graph depicts a monopoly. a. Label the demand curve with the letter 'D', the marginal revenue curve with the letters 'MR', and the marginal cost curve with the letters 'MC' b. Label the quantity in a competitive market 'Qc', the price in a competitive market 'Pc', the quantity a monopoly would sell 'Q', and the price a monopoly would charge 'PM'. c. Shade in the area represents the decrease in consumer surplus of going from a perfectly competitive setting to a monopoly. Briefly describe why this change in consumer surplus occurs.arrow_forwardMm.8. Subject:- economicarrow_forwardPrice $16 $13 $11 MC A. For the monopolist: 1. Profit maximizing output= 2. Price= ATC MR 20 25 30 35 Quantity Based on the above graph, answer the following questions for a monopoly and a perfectly competitive firm. I 3 Profit== B. For the perfectly competitive firm: 1. Profit maximizing output- 2. Price = 3. Profit= C. what is the DWL caused by the monopolist? D=ARarrow_forward
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