Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 21, Problem 9DQ
To determine
Industrial regulation on monopoly .
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Table 15-20
A monopolist faces the following demand curve:
Quantity Price
0
$30
1
$27
2
3
+
$24
$21
$18
5
$15
6
7
8
0
$12
$9
$6
$3
10
$0
Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm
produce in order to maximize profit?
O2 units
3 units
4 units
5 units
Suppose that demand is Qlp)-2000-4p. Consider the marginal revenue curve of a monopolist who operates in this market.
Assume that it is plotted on a two-axis graph in which the horizontal axis measures quantities and the vertical axis measures
marginal revenue. What is the horizontal intercept of the marginal revenue curve?
O 500
O 750
O 1000
O 2000
O 250
i urgent answer both
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- 10. Is the demand for a life-saving drug like Daraprim (Front Page Economics "Drugmaker Hikes Price of AIDS Drug 5,000 Percent!") likely to be elastic or inelastic? How does that affect the pricing decision of a monopolist? LO10-1 IT quarrow_forwardВ 10 9 4 - 5 3 12 15 20 22 What is the quantity by shape in a monopoly market? a) 5 B) 15 C) 22 OD) 12 O TO) 20arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Question 9 please solvearrow_forwardPrice (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)arrow_forward4arrow_forward
- Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $30 $0 90 1 $30 20 80 $30 48 70 3 $30 78 60 $30 110 50 $30 150 Refer to Exhibit 9-4. At an output level of 5 units, the monopolist earns a total profits of about O $100.00 O $102.00 O $82.00 OS70.00 %24 2. 4. 5.arrow_forwardQUESTION 11 74 45 42 38 32 30 26 20 0 Productive efficiency means P O 74 O 45 O 38 O 26 O 20 one O two O few O many QUESTION 12 The number of companies in a monopoly is: O 74 QUESTION 13 45 42 38 32 30 26 P.D 20 MR O 30 O 32 O 38 80 100 120 150 P.D MR 0 Allocative eff. means ATC: © 20 O 26 80 100 120 150 MC ATC MC. ATCarrow_forwardThe figure below shows the total cost and total revenue curves for a monopolist. The profit - maximizing output for the monopolist is 1 unit 2 units 3 units 4 units 5 units The figure below shows the total cost and total revenue curves for a monopolist. The profit-maximizing output for the monopolist is $100 90 80 70 60 50 40 30 20 10 1 unit 0 1 2 3 4 5 6 7 8 9 2 units 3 units O4 units. TR 5 units Q/tarrow_forward
- Question 14 of 30 What is a natural monopoly? A monopoly that faces a high fixed cost and low marginal costs so that the average total cost curve slopes downward. A market in which there is only one firm. A monopoly resulting from one firm's exclusive ownership of a natural resource required to produce a good. O A monopoly that results from government issuing patents. Which of the firms is most likely to be a natural monopoly? O A firm that owns nearly all of the diamond mines in the world. A restaurant that is unable to practice price discrimination and must charge all consumers the same price. O Municipal Power Light, the local supplier of electricity. A pharmaceutical company that has the exclusive right to sell a patented drug. 46°F aarrow_forwardIgnore AFC and AVC 2. Suppose a pure monopolist faces the following demand schedule and the same cost data as the competitive producer discussed in problem 4 at the end of Chapter 10. Calculate the missing TR and MR amounts, and determine the profit-maximizing price and profit-maximizing output for this monopolist. What is the monopolist's profit? Verify your answer graphically and by comparing total revenue and total cost. LO11.4 Average Total Average Variable Average Marginal Product Fixed Cost Cost Total Cost Cost 0 $45 1 $60.00 $45.00 $105.00 40 2 30.00 42.50 72.50 35 3 20.00 40.00 60.00 30 4 15.00 37.50 52.50 35 5 12.00 37.00 49.00 40 6 10.00 37.50 47.50 45 7 8.57 38.57 47.14 55 8 7.50 40.63 48.13 65 9 6.67 43.33 50.00 75 10 6.00 46.50 52.50 Price Quantity Demanded Total Revenue Marginal Revenue $115 83 63 55 48 42 29 2 % 522332 100 0 1 2 3 4 5 6 7 37 8 9 10 $arrow_forward6arrow_forward
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