a) Why is it necessary to regulate the price charged by a firm in a natural monopoly? b) If we allow the natural monopolist to charge a price that generates normal economic profit will that generate allocative efficiency? Explain! c) Could we achieve allocative efficiency if, instead of regulating the price, we provide a production subsidy? Explain.

Q: Which statement is NOT correct?    a. Monopolists charge higher prices than do competitive firms.…

A: Monopoly is a market structure where there is only a single seller of the good who has absolute…

Q: 3. If the demand function for a monopolist's product is p = XX0 – 0,05q and the cost function is c=…

A: Monopolists are price makes and not price takers, they determine profit maximizing price depending…

Q: The single-price monopoly equilibrium is Pareto ineffcient and leads to a positive deadweight loss.…

A: Monopoly refers to the situation when a firm has no close substitutes in the market and it has an…

Q: Each of these are possible benefits from a monopoly EXCEPT A. the ability to minimize deadweight…

A: We have to find each of these are possible benefits from a monopoly.

Q: If a monopoly faces an inverse demand curve of   p=150−​Q,   has a constant marginal and average…

A: Given P=150−​Q Marginal cost = Average cost = $90

Q: When does a company officially become a monopoly? a. when it controls more than 25 percent of the…

A: Answer: A pure monopoly occurs when a single firm provides all the output. But for the purpose of…

Q: A monopolist’s demand function is given by D(p) = 90 − 2p. This monopolist is facing a cost…

A: D(p) or y = 90 − 2p p = 45 - 0.5y C(y) = (1/2)y2 + 600 TR = p*y TR = 45y - 0.5y2

Q: Canada Post has a monopoly on residential mail delivery. Pfizer Inc. makes Lipitor, a prescription…

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Q: What would the problem be if the government forced a natural monopoly to set a price equal to its…

A: A natural monopoly is a firm in such a industry which requires very very large initial investment,…

Q: You are the manager for a monopoly with costs, demand, and marginal revenue as in the graph at the…

A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…

Q: Being the only producer in a monopoly market, can a monopolist charge a very high price to maximize…

A: Thus YES a monopolist can charge a very high price in order to maximize his profit.Under monopoly…

Q: What is the profit-maximizing price and level of output for the monopolist? What area in the figure…

A: Monopoly can be defined as the market structure in which there is a single producer of a commodity…

Q: What is the profit maximization condition the monopoly uses to choose optimal quantity? Again assume…

A: The monopoly is a market structure in which there is a single seller and many buyers in the market.…

Q: Give two examples of price discrimination. In each case, explain why the monopolist chooses to…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: f a natural monopolist practices perfect price discrimination, how does it affect the…

A: Price discrimination refers to the practice of charging different prices from different buyers. This…

Q: the competition price? Assume all other things are equal, of course, or a comparison is meaningless…

A: In monopoly, there is a single firm producing unique good while in perfect competition, there are…

Q: What is a natural monopoly? Give an example. Describe the concept of how elasticity could exist…

A: A natural monopoly is mainly associated with government and natural resources. For example railways…

Q: Consider the welfare effects when the industry operates under a competitive market versus a…

A: In the diagram, area of the triangle, ABC is the deadweight loss.

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Q: . Assume that the marginal cost curve is given by mc(q) = 5+ 2q. The demand is equal to %3D qd = 100…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Sacramento Gas and Electric is a firm that represents a natural monopoly. Assume that there will be…

A: Since , it is given that there is natural monopoly enjoyed by the Sacramento Gas and Electric firm.…

Q: Describe and show on a graph the effects on output and welfare if the government regulates a…

A: Monopoly refers to the type of market where only one individual controls all the supply or…

Q: What is the dead weight loss? a.The loss in welfare due to the monopoly producing a LARGER amount…

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Q: Is Price Discrimination a case of monopoly only? If yes, then why and how? Why is it favorable to…

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Q: True or false; explain your answer. Suppose a firm sells its good in both the United States and the…

A: A monopoly is a market condition, where only one firm operates in the market.  A monopoly firm has…

Q: Consider a monopoly market in which the market demand curve is given by P = 240 - 2Q, the marginal…

A: Total surplus is the sum of consumer and producer surplus. With the perfect competitive we have more…

Q: If the government wants to increase the market efficiency through price regulation, would you…

A: If the government wants to increase the market efficiency through price regulation, this will be…

Q: Indicate whether the statement is TRUE, FALSE, or UNCERTAIN and explain why. 1. A firm is a…

A: A monopolist is an individual, a group, or a corporation that controls and dominates a market for a…

Q: Consider a monopoly market with demand curve Q(P) = $. Suppose that producing a good costs $1 per…

A: Monopolist will produce the goods where marginal revenue is equal to marginal cost .

Q: How does the monopoly price compare to the competition price ? Assume all other things are equal, of…

A: Monopoly price is determined by the monopoly itself.

Q: A given monopoly faces a demand curve Q = 310 - 2P and produces with constant marginal costs equal…

A: Given : Q = 310 - 2P  MC = 22

Q: Suppose the following table contains data of a Monopoly.   Output       Price (Tk.)…

A: Q P TC TR=P*Q MR = ∆TR/∆Q MC=∆TC/∆Q 0 14 2 0     1 12 6 12 12 4 2 10 8 20 8 2 3 8 12 24 4 4…

Q: Illustrate a so-called natural monopoly in a figure and explain with the help of the figure the…

A: Natural monopoly is the sole supplier of an exclusive goods and services which involve very high…

Q: Suppose a monopoly firm’s total cost of production TC = f + c•Q where f > 0 and c > 0. Is this firm…

A: Natural Monopoly occurs where Average cost of production falls over the wide range of output.

Q: In British Columbia, Canada a company named after Tim Hortons runs a monopoly on a sweet snack…

A: Monopoly is a market where only one seller operates and that too he is the price setter in the…

Q: Suppose a monopoly firm in the short run experiences an increase in the price of oil, a variable…

A: Answer: A monopoly produces that level of output in the short run where the marginal cost curve…

Q: What is true about the monopoly's marginal revenue? Assume no price discrimination please (just one…

A: A monopoly is a sole producer of a good in the market thus acting as a price maker.

Q: What are the main barriers to entry in the electricity supply market, and how Electricity Company…

A: 1.ans.. Part 1st Conditions of entry into electricity generation markets have some features in…

Q: Assume the following equations describe the conditions for a monopoly:   Qd = 2,000 - 100P TC =…

A: Hi! Thank you for the question but as per the guidelines, we only answer the first three sub-parts…

Q: Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the…

A: A market structure which has many firms tend to be more competitive. Monopoly is a market structure…

Q: Is it possible to have a situation where a profit maximizing monopoly chooses to produce the same…

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Q: Tiny is a small, isolated community served by one newspaper that can meet the market demand at a…

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Q: In a monopoly, strategic entry barriers are always the result of absolute cost advantages? Is this…

A: In a market, strategic entry barriers include the actions ot strategies used by a firm to restrict…

Q: What is the usual shape of a marginal revenue curve for a monopolist? Why? 2.When a monopolist…

A: A monopoly is a market structure in which only one firm sells output, this firm has all market power…