Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 25, Problem 4WNG
To determine
Determine the quantity in the figure that is consistent with profit regulation and
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Students have asked these similar questions
U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing reimportation of their drugs back into the United States.
QUESTION 2
Consider the following graph:
Price
P1
P2
P3
P4
P5
Q5 Q302 01
04
Curve D
Curve A
Market efficient quantity
Market efficient price
Curve C
Curve A = MR, Curve B = Demand, Curve C = ATC, Curve D = MC
Match the correct values to the descriptions:
▾ Monopoly profit maximizing quantity
Curve B
Monopoly profit maximizing price
Quantity
A. P1
B. P2
C. P3
D. P4
E. P5
F. Q1
G. Q2
H. Q3
I. Q4
J. Q5
Discuss the basic differences between a
competitive and a monopoly market. Which
market has higher elastic demand in the long run
and why?
Chapter 25 Solutions
Economics (MindTap Course List)
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Similar questions
- Blue INK is the only cabel service provider in Gazipur. The diagram below depicts the price, output and costs incurred by Blue INK. Use the graph to answer the following questions: 1. What is the Total revenue generated by Blue INK at the profit maximizing level of output? 2. If the Cable Service Market turns into a Perfectly Competitive Market, what will be the total ammount of the service provided? 3. If the market turns into a Monopoly market again, what will be the total deadweight loss created?arrow_forwardIt is often said that a competitive market is more beneficial for the consumers as compared to the monopoly market. Why ? Explain.arrow_forwardU.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profit reasons, oppose laws allowing re-importation of drugs to the United States.arrow_forward
- Explain the concept of black marketing as a direct consequence of price ceiling in economics?arrow_forwardHow do I figure out the second part?arrow_forwardU.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. Explain why these companies, for profifit reasons, oppose laws allowing reimportation of drugs to the United States.arrow_forward
- Question 18 Alex Potter owns the only well in a town that produces clean drinking water. He faces the following demand P=200-2Q, and marginal cost MC=50+2Q, marginal revenue MR= 200-4Q curves. In order to maximize profits, Alex should charge a price of $150 at the profit maximizing quantity with a marginal revenue equal to $150. $100 at the profit maximizing quantity with a marginal revenue equal to $150. $100 at the profit maximizing quantity with a marginal revenue equal to $100. $150 at the profit maximizing quantity with a marginal revenue equal to $100. O Oarrow_forwardHow does price discrimination play a role in the economy?How does the idea of price discrimination apply to an industry?arrow_forward1. Calculate the profit-maximizing quantity and price for the non-student market. (attached Figure A: Non-Students) 2. Calculate the profit-maximizing quantity and price for the student market. (attached Figure B: Students) 3. Calculate the profit if the firm charges both the non-students and students the same price of $20. (attached Figure A: Non-Students and Figure B: Students) 4. Calculate the profit if the monopoly firm perfectly price discriminates. (attached Figure A: Non-Students and Figure B: Students)arrow_forward
- Define price discrimination. Give two examples of price discrimination. How does perfect price discrimination affect consumer surplus, producer surplus and total surplus?arrow_forward1. A manufacturer estimates that D(p)=3000e0.05p units of a particular good will be sold at market price of p cedis per unit. Determine the market price that will result in marginal revenue of zero. 2. A manufacturer estimates that q = 800/30 – p units of a commodity are demanded when cedis per unit are charged. a. Express the price elasticity of demand as function of p . b. Calculate the price elasticity of demand when p=10. Interpret the result. c. Find the price at which the price elasticity of demand is unit-elastic. 3. An auto maker estimates that when q units of its saloon cars are sold in a day, its profit in millions of cedis is modelled as P(q) =100+25In 20 Find the 2 number of cars that should be produced and sold to maximise profit.arrow_forwardMonopoly firms are a lot more profitable than perfectly competitive firms. The primary reason is that the monopoly firm charges a price that is greater than marginal cost at the profit maximizing quantity. Explain this statement with a graph. Specifically, explain how the profit maximizing quantity and price are determined.arrow_forward
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