PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 9, Problem 18RQ
What is the usual shape of a total revenue curve for a monopolist? Why?
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1. After the reopening of borders with mainland China following the COVID-19 lockdown, residents
living near the border now have the option to shop for food on either side. In Hong Kong, the cost
of food is at its listed price, while across the border in mainland China, the price is only half that
of Hong Kong's. A recent report indicates a decline in food sales in Hong Kong post-reopening.
**
Diagrams need not be to scale; Focus on accurately representing the relevant concepts
and relationships rather than the exact proportions.
(a) Using a diagram, explain why Hong Kong's food sales might have dropped after the border
reopening. Assume that consumers are indifferent between purchasing food in Hong Kong or
mainland China, and therefore, their indifference curves have a slope of one like below.
Additionally, consider that there are no transport costs and the daily food budget for consumers
is identical whether they shop in Hong Kong or mainland China. I
3.
14
(b) In response to the…
Chapter 9 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Suppose the local electrical utility, a legal...Ch. 9 - If Congress reduced the period of patent...Ch. 9 - Suppose demand for a monopolys product falls 50...Ch. 9 - Imagine a monopolist could charge a different...Ch. 9 - How is monopoly different from perfect...Ch. 9 - What is a barrier to entry? Give some examples.Ch. 9 - What is a natural monopoly?Ch. 9 - What is a legal monopoly?
Ch. 9 - What is predatory pricing?Ch. 9 - How is intellectual property different from other...Ch. 9 - What legal mechanisms protect intellectual...Ch. 9 - In what sense is a natural monopoly natural?Ch. 9 - How is the demand curve perceived by a perfectly...Ch. 9 - How does the demand curve perceived by a...Ch. 9 - Is a monopolist a price taker? Explain briefly.Ch. 9 - What is the usual shape of a total revenue curve...Ch. 9 - What is the usual shape of a marginal revenue cuwe...Ch. 9 - How can a monopolist identify the...Ch. 9 - How can a monopolist identify the...Ch. 9 - When a monopolist identifies its profit-maximizing...Ch. 9 - Is a monopolist allocatively efficient? Why or why...Ch. 9 - How does the quantity produced and price charged...Ch. 9 - ALCOA does not have the monopoly power it once...Ch. 9 - Why are generic pharmaceuticals significantly...Ch. 9 - For many years, the Justice Department has tried...Ch. 9 - Intellectual property laws are intended to promote...Ch. 9 - Imagine that you ale managing a small firm and...Ch. 9 - If a monopoly firm is earning profits, how much...Ch. 9 - Return to Figure 9.2. Suppose P0 is 10 and P1 is...Ch. 9 - Draw the demand curve, marginal revenue, and...Ch. 9 - Draw a monopolists demand curve, marginal revenue,...
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- 2. Health Food Company is a well-known global brand that specializes in healthy and organic food products. One of their main products is organic chicken, which they source from small farmers in the area. Health Food Company is the sole buyer of organic chicken in the market. (a) In the context of the organic chicken industry, what type of market structure is Health Food Company operating in? (b) Using a diagram, explain how the identified market structure affects the input pricing and output decisions of Health Food Company. Specifically, include the relevant curves and any key points such as the profit-maximizing price and quantity. () (c) How can encouraging small chicken farmers to form bargaining associations help improve their trade terms? Explain how this works by drawing on the graph in answer (b) to illustrate your answer.arrow_forward2. Suppose that a farmer has two ways to produce his crop. He can use a low-polluting technology with the marginal cost curve MCL or a high polluting technology with the marginal cost curve MCH. If the farmer uses the high-polluting technology, for each unit of quantity produced, one unit of pollution is also produced. Pollution causes pollution damages that are valued at $E per unit. The good produced can be sold in the market for $P per unit. P 1 MCH 0 Q₁ MCL Q2 E a. b. C. If there are no restrictions on the firm's choices, which technology will the farmer use and what quantity will he produce? Explain, referring to the area identified in the figure Given your response in part a, is it socially efficient for there to be no restriction on production? Explain, referring to the area identified in the figure If the government restricts production to Q1, what technology would the farmer choose? Would a socially efficient outcome be achieved? Explain, referring to the area identified in…arrow_forwardI need help in seeing how these are the answers. If you could please write down your steps so I can see how it's done please.arrow_forward
- Suppose that a random sample of 216 twenty-year-old men is selected from a population and that their heights and weights are recorded. A regression of weight on height yields Weight = (-107.3628) + 4.2552 x Height, R2 = 0.875, SER = 11.0160 (2.3220) (0.3348) where Weight is measured in pounds and Height is measured in inches. A man has a late growth spurt and grows 1.6200 inches over the course of a year. Construct a confidence interval of 90% for the person's weight gain. The 90% confidence interval for the person's weight gain is ( ☐ ☐) (in pounds). (Round your responses to two decimal places.)arrow_forwardSuppose that (Y, X) satisfy the assumptions specified here. A random sample of n = 498 is drawn and yields Ŷ= 6.47 + 5.66X, R2 = 0.83, SER = 5.3 (3.7) (3.4) Where the numbers in parentheses are the standard errors of the estimated coefficients B₁ = 6.47 and B₁ = 5.66 respectively. Suppose you wanted to test that B₁ is zero at the 5% level. That is, Ho: B₁ = 0 vs. H₁: B₁ #0 Report the t-statistic and p-value for this test. Definition The t-statistic is (Round your response to two decimal places) ☑ The Least Squares Assumptions Y=Bo+B₁X+u, i = 1,..., n, where 1. The error term u; has conditional mean zero given X;: E (u;|X;) = 0; 2. (Y;, X¡), i = 1,..., n, are independent and identically distributed (i.i.d.) draws from i their joint distribution; and 3. Large outliers are unlikely: X; and Y, have nonzero finite fourth moments.arrow_forwardAsap pleasearrow_forward
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