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Based upon the information in Question 27 above, Analytical Problem #1:
(c) What price should the monopolist charge to maximize their profits? Solve, record your answer here, and submit your underlying work.
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- A key difference between monopoly and perfect competition is options: the demand curve faced by a perfectly competitive firm is different than the industry demand curve, but the demand curve faced by the monopolist is the same as the industry demand curve. Perfectly competitive firms have considerably more market power compared to monopolists. Price equals marginal revenue for a monopolist, but not for a perfectly competitive firm. the demand curve faced by a monopolist is different than the industry demand curve, but the demand curve faced by a perfectly competitive firm is the same as the industry demand curve.“The social desirability of any particular firm should be judged not on the basis of its market share but on the basis of its conduct and performance.” Make a counterargument, referring to the monopoly model in your statement.The barrier to entry that protects natural monopoly is Question 2 options: Better products. Large economies of scale. Large economies of scale. None of the above.
- Question 9 True/False: Natural monopolies occur because they have a declining average cost curve over large outputs relative to the market demand, Group of answer choices True FalseThe market demand curve for a monopolist limits the monopolists ability to profit from its market power because Question 9 options: a) it cannot charge a price that is not on its demand curve b) it must raise the price to increase profit c) it must produce a quantity of output less than the profit maximizing level of output d) none of the aboveBoth questions answered Question 1: Which of the following is true of a profit-maximizing monopolist firm? 1) It has no incentive to minimize its costs 2) It sets price equal to marginal cost 3) It chooses a production level higher than that which is socially optimal 4) It chooses a production level on the elastic portion of the demand curve 5) It chooses a production level such that marginal revenue is greater than marginal cost Question 2: In which of the following market structures do firms maximize profits by producing at the point where price is equal to marginal cost? I. Perfect competition II. Monopoly III. Oligopoly IV. Monopolistic competition 1) I 2) II 3) II and III 4) I and IV 5) I, II, III, and IV
- Which one of the following is the best description of a monopolist? a.a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry b.a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Wisconsin c.a firm that is large relative to its competitors d.a firm that produces a single productThe following are examples of Barriers for Entry that could lead to Monopoly power, EXCEPT: Question 21 options: Limited demand Economies of Scale Technological innovations Predatory PricingSuppose that a monopolist charges each buyer a price equal to her maximum willingness to pay. In this case of ______ , total consumer surplus is equal to ______. Question 10 options: perfect price discrimination; monopoly profits perfect price discrimination; zero inelastic price discrimination; zero efficiency pricing; monopoly profits bulk pricing; zero
- Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry—that is, other companies cannot enter the market to create competition in that particular industry. Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Scenario Barriers to Entry Exclusive Ownership of a Key Resource Government-Created Monopolies Economies of Scale The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late 19th century until the 1940s. In the public water industry, low average total costs are obtained only…Question 10.10. The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why there are barriers to entry in pure monopoly. a monopoly has a perfectly elastic demand curve. marginal revenue is less than average revenue. total revenues are greater than total costs at the profit-maximizing level of output. Question 11.11. Which case below best represents a case of price discrimination? An insurance company offers discounts to safe drivers. A major airline sells tickets to senior citizens at lower prices than to other passengers. A professional baseball team pays two players with identical batting averages different salaries. A utility company charges less for electricity used during "off-peak" hours, when it does not have to operate its less-efficient generating plants. Question 12.12. In which industry is monopolistic competition most likely to be…Judge Mark Griffiths finds that Moodle is a relentless and predatory monopolist. Judge Griffiths says that: Moodle established and maintained the Blackboard monopoly by using the "applications barrier to entry," which gives Moodle enduring monopoly power. Moodle harnesses independent software vendors to create products that take advantage of new application program interfaces (APIs) built into each release of Blackboard. Gives PC makers no choice but to install Blackboard, at whatever price Moodle decrees. Moodle maintains that it has sought only to innovate, serve customers, and protect its intellectual property. Moodle says that it is not a monopoly because: It competes with itself by continually releasing "new and improved" versions of Blackboard. Technological change will ensure that any dominance it enjoys is fragile. Already, "middleware" (applications like RealNetworks) have their own APIs, which new and existing applications might hook on to…
