part D E F G D)Refer to the graph above. If this monopolist were regulated by govemment agency and forced toset the socially optimal price, it would likely produceand charge the price ofA) O units of output; $2.40B) 300 units of output; $2.301400 units of output; $9.00D) 550 units of output; $2.20E) The socially optimal price, is socially optimal becauseA) Increases the monopolist profit.B) It minimizes ATc."C) It allows to eam a normal profit.D) It achieves allocative efficiency,F) The main problem with imposing the socially optimal price on monopoly is that socially optimalprice:a) May be so low that the regulated monopoly experiences economic loss.b) May be higher than the unregulated monopoly price.c) May cause the regulated monopoly to engage in price discrimination.d) May reduce the regulated monopoly output.G) Refer to the graph above and assume that the demand vertical intercept$16. If this single-pricemonopolist adopts first degree price discrimination, it should set price equal tounits and increase its profit towould sellA) $11.50; 1000; $3,000B) $9.00; 1400; $3,500B) $8.00; 1600; $6,400D) $11.50; 300; $700 QUESTION 3: Consider the demand and cost curves for a local utilities firm. All underlying workmust be shown.MC$11.50AC$9.00$8.00$5. 50MR300100014001600QuantityA) Refer to the graph above. If this monopolist were allowed to choose the profit-maximizing levelof output, it would produceand charge price ofA) 1000 units of output; $11.50B) 1400 units of output; $9.00C) 300 units of output; $11.50D) 1600 units of output; $8.00B) Refer to the graph above. At the profit maximizing output level, this monopolist would eam:A) Positive economic profit of $3,000. B) Zero economic profit (is breaking even).B) Negative economic profit of $6,000 D) Positive economic profit of $6,000C) Refer to the graph above. At the profit maximizing output level and price this monopolistwould reduce economic surplus and market efficiency by:A) $1,200B) $2,400C) $2,200D) $3,000

Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…

D)Refer to the graph above. If this monopolist were regulated by govemment agency and forced to set the socially optimal price, it would likely produce and charge the price of A) O units of output; $2.40 B) 300 units of output; $2.30 C) 1400 units of output; $9.00 D) 550 units of output; $2.20 E) The socially optimal price, is socially optimal because A) Increases the monopolist profit. B) It minimizes ATC. C) It allows to eam a normal profit. D) It achieves allocative efficiency, F) The main problem with imposing the socially optimal price on monopoly is that socially optimal price: a) May be so low that the regulated monopoly experiences economic loss. b) May be higher than the unregulated monopoly price. c) May cause the regulated monopoly to engage in price discrimination. d) May reduce the regulated monopoly output.

D)Refer to the graph above. If this monopolist were regulated by govemment agency and forced to set the socially optimal price, it would likely produce and charge the price of A) O units of output; $2.40 B) 300 units of output; $2.30 C) 1400 units of output; $9.00 D) 550 units of output; $2.20 E) The socially optimal price, is socially optimal because A) Increases the monopolist profit. B) It minimizes ATC. C) It allows to eam a normal profit. D) It achieves allocative efficiency, F) The main problem with imposing the socially optimal price on monopoly is that socially optimal price: a) May be so low that the regulated monopoly experiences economic loss. b) May be higher than the unregulated monopoly price. c) May cause the regulated monopoly to engage in price discrimination. d) May reduce the regulated monopoly output.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter16: Government Regulation

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

There are 5 subparts to this Questionn. please consider a market served by a monopolist. The monopolist has a linear marginal cost (shown here as Marginal Private Cost, MPCM) and a downward-sloping demand curve D0. Here is a graphical representation of that market. See attached image for graph. 1) As noted in the introduction for Questions 1 through 5, the market is served by a monopolist. Assume that this monopolist is making a positive economic profit. Add any necessary curve(s) to the graph shown above and graphically indicate: The original monopoly price P0 and monopoly quantity Q0. The “socially optimal” output (the output the Benevolent Dictator would choose) QSO. The resulting Consumer Surplus CS0, the resulting Producer Surplus PS0, and the size of Dead-Weight Loss DWL0 if there is such a loss. Positive economic profits π0. (Note that here we asking you to graphically depict the total profits earned by the monopolist and not just the profits earned per unit sold. You may…
Consider a monopolist who is selling his blockbuster drug in two markets where one market is much larger than the other. Suppose the demand in the two markets is given by q1 = 30 − p1 and q2 = 3 − p2 (quantity is measured in millions of complete dosages and price is in your favorite currency) and the marginal cost of production and distribution is roughly the same and equal to 1 per unit (c=1). This problem asks you to compare equilibrium outcomes (prices, quantities, profits, consumer surplus, and consumer surplus per unit of output) when the monopolist can price discriminate across the two markets versus when it must set a uniform price. It then asks you to comment on some recent policy proposals. For each market separately, set up and solve the monopolist’s profit-maximizing problem. Specifically, write down/compute the following. Inverse demand and the profit functions. Equilibrium prices (), quantities () and profits () Consumer surplus () and consumer surplus per unit of…
E4 Suppose that the monopolist can produce with total cost: TC = 10Q. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q1 = 120 - 4P1, and Q2. = 240 - 2P2. Suppose that consumers can mail the product from cheaper location to a more expensive location freely (mailing cost $0). What would be the monopolist profit? 3750,3500,5250,4000.
Q62 Assume that Mattel is a monopolist that sells 8 units of a toy per day at a unit price of $16. If it lowers the price to $15, its total revenue increases by $37. This implies that its sales quantity increases by Multiple Choice 1 unit per day. 12 units per day. 2 units per day. 3 units per day. 4 units per day.
2. A monopolist has two specific demanders with demand equations: qA = 10 – p and qB = 10 – 2p. This monopolist implements an optimal two-part tariff pricing scheme, under which demanders pay a fixed feea for the right to consume the good and a uniform price p for each unit consumed. The monopolist chooses a and p to maximize profits. This monopolist produces at constant average and marginal costs of AC = MC = 2. The monopolist’s profits are __________ and the average price paid by demander B is _________.
1. Assume an industry with demand Q=100-p where there is a monopolist with constant marginal cost equal to $20. Suppose that many perfectly competitive firms could produce in this industry at a marginal cost equal to $16. D. Propose a simple way to disaggregate the social cost of monopoly in the usual welfare loss and the cost attributable to its productive inefficiency.
Suppose a monopolistically competitive firm operates in a long run which produces 40 units of output at 120 taka per-unit cost (average total cost). Also MC of producing 40 unit output is 60 taka. By using this information, show the long run situation of a monopolistically competitive firm in an appropriate diagram. c) Calculate excess capacity if socially efficient output is 100 units. Show it in graph too must answer C part.
Problem 2Suppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is EB=-1.9, while the price elasticity of demand for leisure travelers is EV=-2.1. The airline wants to set the prices separately for business and vacation travelers.a) If the marginal cost of transporting each passenger is the same, and the airline is able to separate the two groups perfectly, what is the optimal surcharge (in %) on business travelers? (for example, if leisure travelers pay 100, and business travelers pay 200, then the surcharge is 100%)Answer= b) Suppose that in order to separate business travelers, the airline must offer them slightly better conditions on board (for example, serve them a meal). As a result, the marginal cost of flying a business traveler is 30% higher than for a leisure traveler. What is the optimal surcharge (in %) on business travelers in this case?Answer= c) Now suppose the airline introduces a Basic Economy fare, where…
A monopoly faces an inverse demand curve, p(y) = 100 − 2y, and has constant marginal costs of 20. What is its profit-maximizing level of output and price? What is the socially optimal price and output for this firm? (Perfectly competitive solution) What is the deadweight loss due to the monopolistic behavior of this firm? d. Show your work algebraically and graphically.
A monopolist sells a single good in two periods. There are two conumers who want to buy one unit of the good in each period. The willingnessto pay of consumer A is 2, while the willingness to pay of consumer B is 1.5. a) Suppose the monopolist can only set one price in each period and cannot identify consumers at all. What is the optimal price? b) Suppose that the monoplist has indetified which consumers is A and B in period two and can set different prices. What are the optimal prices? c) Would the monoplist want to set a price of 2 in the first period, if he can identify the consumer who bought the product in the next period. That is if he can track who has bought in the first period. Assume for the moment that consumer A buys in the first period at a price of 2.
Suppose a monopolist faces two markets withdemand curves given by D1(p1) = 200 − p1D2(p2) = 100 − 2p2Assume that the monopolist’s cost function is c(y) = y2 1. What is the optimal prices for the monopolist if it can charge different prices in these markets?2. What is the optimal price if the monopolist must charge the same price in each market?3. How much total consumers’ surplus changes between the two separate prices and the sameprice cases?
In this problem, the inverse demand function is 100 – Q, and marginal cost is 90 – Q/2. A monopolist dominates this Internet industry. The government orders the firm to produce at the point where the price equals marginal cost. (a) Why might the government think that this level of output would increase economic efficiency? (b) Now calculate the output level at which price equals average cost, and calculate profit. Why might the monopolist prefer this output level to the one in which price equals marginal cost? (c) How can the government induce the monopoly to produce, for years to come, at the point where price equals marginal cost?