Does a monopoly face any market constraints? Question options: a) No. A monopoly can produce as much as it wants and charge whatever price it chooses. b) Yes. To sell a larger quantity, the monopoly must set a lower price. c) Yes. It can't charge a higher price unless demand for its good or service increases. d) Yes. It must produce at its minimum efficient scale to maximize profit. e) No. A monopoly determines demand and supply.

Does a monopoly face any market constraints? Question options: a) No. A monopoly can produce as much as it wants and charge whatever price it chooses. b) Yes. To sell a larger quantity, the monopoly must set a lower price. c) Yes. It can't charge a higher price unless demand for its good or service increases. d) Yes. It must produce at its minimum efficient scale to maximize profit. e) No. A monopoly determines demand and supply.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter9: Monopoly

Section: Chapter Questions

Problem 8SQ

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Which of the following is true about the effect of monopoly power on surplus? choose from answers below (Hint: monopoly entails a higher price as compared to the normal competitive equilibrium price and quantity) Group of answer choices a. Consumer and producer surplus stays the same. b. Some of the consumer surplus goes to the producer as profit under monopoly power. c. Some of the producer surplus becomes a part of the consumer surplus under monopoly power. d. None of the above.
Because of producer–producer rivalry, the price will tend to Multiple Choice rise up to the maximum price the consumers are willing and able to pay. be the same as the monopoly price. be driven to a lower price. be the same as the competitive price.
A market structure that is “monopoly” is NOT ... Group of answer choices a. production efficient b. allocation efficient c. neither allocation nor production efficient
Which of the following statements is TRUE? A) A monopoly cannot set price and quantity such that the point lies above the demand curve. B) A monopoly can charge whatever it wants. C) Profit maximization occurs by setting price first. D) Both A and B. The more inelastic the demand curve, a monopoly A) will have a smaller Lerner Index. B) will face a lower marginal cost. C) will earn less profit. D) will lose fewer sales as it raises its price.
In terms of which of the following is the monopoly greater than the competitive market? a) Prevalence b) The number of firms c)Market quantity d) Market power of a firm e) c and d
True or False, and why? If the demand curve is denoted by PDX = 100 – 0.5 X while the MC = 2 +1.5 X monopoly will result in a welfare loss of 96.04 compared with a competitive market.
1). The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will: Exceed the marginal cost of diamonds but equal to the average total cost of diamonds. Exceed both the marginal cost and the average total cost of diamonds. Be equal to the marginal cost of diamonds. Be equal to the average total cost of diamonds. 2). Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by: Economies of scope Diseconomies of scale Diminishing marginal productivity Economies of scale 3). Suppose that college tuition is higher this year than last and that more students are…
Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.
You run a monopoly firm that serves two types of consumers. Individual type-A consumers have a value of 8 for their first unit of your product, a value of 4 for their second unit, and a value of zero for all additional units. Individual type-B consumers have a value of 5 for a single unit of the product and zero for any additional units. There are 3 type-A consumers and 5 type-B consumers. Your marginal cost is zero. b) If your firm can practice first-degree price discrimination, how many units are sold to each consumer and how much does each consumer pay? What is your total profit?
Microsoft Windows 8 to Go on Sale in October. Microsoft announced that its Windows 8 operating system will be released in October 2012, three years after Windows 7 went public. Windows 8 will be available in 109 languages across 231 markets worldwide a. Is Microsoft a natural monopoly or a legal monopoly? b. Does Microsoft price discriminate or do the different prices of Windows reflect cost differences? c. Sketch a demand curve for Windows, Microsoft’s marginal cost curve, and the distribution of the total surplus between consumers and Microsoft.
Which of the following statements about monopoly power is correct? Group of answer choices Monopoly power occurs when firms set price equal to marginal cost. Firms with monopoly power can set prices above average cost and do not expect new competition. Monopoly power is not regulated by the American government. Monopoly power can only be attained in markets that have less than five firms
One way a company can cover its costs and, at the same time, obey a marginal cost pricing rule is by Question content area bottom Part 1 A. increasing production. B. decreasing its marginal cost but not changing its average total cost. C. decreasing production. D. using price discrimination. E.choosing output levels according to the profit−maximizing rule.