ECONOMICS W/CONNECT+20 >C<
20th Edition
ISBN: 9781259714993
Author: McConnell
Publisher: MCG CUSTOM
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Chapter 17, Problem 10DQ
To determine
The decision-making process.
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Price (dollars per unit)
30
24
21
18
16
12
O
4
$12 to $18.
$18 to $24.
$12 to $18.
a
$12 to $24.
8
MR
b
12
LRAC (inflated)
LRAC
MC
In the above figure, if the natural monopoly is regulated using an average cost pricing rule, but the firm can pad its costs and make
the regulator believe its costs are LRAC (inflated), then the price the firm charges will increase from
D₁
20
16
Quantity (millions)
lf a monopolist can find buyers for 23 units at a price of $800, and if the marginal revenue due to the 24th unit is $560, the highest price at which the monopolist can find buyers for 24 units must be:Select one:O a. 780O b. 785Oc. 790 O d. 794Oe. 798
Demand and Supply of Labor by Firm A
Output MPL
No. of
Workers
ME
0
0
1
20
20
250
2
50
30
350
3
75
25
450
4
95
20
550
5
110
15
650
6
120
10
750
1. Firm A above is an example of?
O perfectly competitive seller of its output
monopolistic seller of its output
2. Firm A in wage scenario 1 is a?
O perfectly competitive buyer of labor
monopsonistic buyer of labor
3. In wage Scenario 1, how many workers should Firm A hire to maximize its profits?
MRPL
MR=20
400
600
500
400
300
200
Scenario 1
W = ME
400
400
400
400
400
400
Scenario 2
250
300
350
400
450
500
Chapter 17 Solutions
ECONOMICS W/CONNECT+20 >C<
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 5ADQCh. 17.A - Prob. 1ARQ
Ch. 17.A - Prob. 2ARQCh. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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- b. If the monopoly operates in a perfectly competitive labor market where the going market wage is $20, what is the firm's profit maximizing level of employment? The firm's profit maximizing level of employment is 4 labor workers.arrow_forwardClothing companies like Vineyard Vines offer various student, teacher, military, and essential worker discounts. Let’s assume that the marginal cost of producing a classic Shep Shirt at Vineyard Vines is $30 per shirt. For people who don’t fall into the discount-eligible categories, the demand and marginal revenue equations are: Pu = 200 - .5Qu MRu = 200 – Qu For people who are discount-eligible, the demand and marginal revenue equations are given by: Pd = 150 - .5Qd MRd = 150 - Qd Assuming that price discrimination is possible, calculate the profit-maximizing price and quantity for each group of shoppers. Ignoring fixed costs, calculate the profit Vineyard Vines would be able to make on this particular item if the company is able to engage in price discrimination.arrow_forwardUrgently needarrow_forward
- urgentarrow_forwardA monopolist earns $40 million annually and will maintain that level of profit indefinitely, provided that no other firm enters the However, if another firm enters the market, the monopolist will earn $40 million in the current period and $22 million annually thereafter. The opportunity cost of funds is 15 percent, and profits in each period are realized at the beginning of each perioc a. What is the present value of the monopolist's current and future earnings if entry occurs? Instructions: Enter your response rounded to the nearest penny (two decimal places). million $ b. If the monopolist can earn $27 million indefinitely by limit pricing, should it do so? O Yes O Noarrow_forwardSuppose that a monopoly firm finds that its MR is $50 for the first unit sold each day, $49 for the second unit sold each day, $48 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on. a. What is the firm’s MRP for each of the first five workers? b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $40 per unit for all units sold. At that price, what is the firm’s MRP for each of the first five workers? c. If the daily wage paid to workers is $170 per day, how many workers will the unregulated monopoly demand? How many will the regulated monopoly demand? Looking at those figures, will the regulated or the unregulated monopoly demand more workers at that wage? d. If the daily wage paid to workers falls to $77 per day, how many workers will the unregulated monopoly demand? How many will the…arrow_forward
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