Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 9, Problem 5SQ
To determine
The impact of demand curve lying below the
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a)Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost.
b)Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit.
c)Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly.
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Currently, a monopolist's profit-maximizing output is 400 units per week and it sells its output at a price of
S60 per unit. The firm's total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40
in extra revenue from the sale of the last unit produced each week.
a. What are the firm's weekly economic profits?
b. What is the firm's marginal cost?
c. What is the firm's average total cost?
Chapter 9 Solutions
Micro Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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- a. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm's total revenue and total cost. b. Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly.arrow_forwarda. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost. b. Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly. Kindly answer all the sub parts.arrow_forwardFor a monopolist to produce one more unit of output, Select one: a. the price must be equal to the marginal cost b. the difference of total revenue gained and total revenue lost must be greater than zero c. the price must be equal to the average variable cost. d. demand must be in the in inelastic range of the demand curve e. the difference of the price and marginal revenue must be equal to zeroarrow_forward
- A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What type(s) of profit would you expect a monopolist to earn in the long-run? Why the difference? Use the editor to format your answerarrow_forwardAs long as _________ exist, a monopolist can earn positive profits in the long run A.Entry barriers B.Maximum prices C.Brandsarrow_forwardQUESTION 1 A. The total cost function for a monopolist is given by TC = 44,000 + 180Q + 0.03Q² and the demand function is P = 420 – 0.06Q per unit of output. i. What is the profit maximising level of output? ii. Calculate the profit maximizing price. iii. Calculate total profit at the profit maximising level of output.arrow_forward
- A monopolist has a demand curve given by Q=100-P and a total cost curve given by TC= Q2 + 16. a.Find the monopolist’s profit maximizing quantity and price. Indicate them on the graph. b.How much economic profit will the monopolist earn? c. Calculate the price elasticity of demand at the equilibrium price level.arrow_forwardIn the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short run marginal cost and price is: A. Greater than average total costB. Less than average total costC. Greater than average variable cost D. Less than average variable costarrow_forwardNeed help.arrow_forward
- It is possible for a monopolist's to earn economic profits even in the long run due to: a. its barriers to the entry of other firms. b. the nature of the monopolist's product. c. its practice of third-degree price discrimination.arrow_forwardSuppose both a monopolist and a perfectly competitive firm charge a price corresponding to the quantity at the intersection of the marginal cost and marginal revenue curves. If this price is between each firm's average variable cost and average total cost curves, a. both firms will shut down in the short run. b. both firms will continue to operate in the short run. c. the perfectly competitive firm will continue to operate in spite of the loss but the monopolist will earn a profit. d. the perfectly competitive firm will continue to operate in the short run but the monopolist will shut down.arrow_forwardSolve the attachmentarrow_forward
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