part 7 8 Equilibrium for the MonopolistNow consider the same demand and cost curves, but assume the market is a monopoly. Therefore,MR represents the monopolist's marginal revenue curve and MC represents the monopolisť'smarginal cost curve. Using Figure 34.2, answer the following questions.X Figure 34.2Monopoly12MC1110ATC8-7.3.1-MR8 9 10 11 12QUANTITY5. What quantity of output will be produced?.Why?6. What price will the monopolist establish? -Why?7. Calculate the amount of the consumer surplus. Darkly shade the area of consumer surplus.8. Calculate the amount of the producer surplus. Lightly shade the area of producer surplus.COSTS/REVENUE Part AEquilibrium for the Perfectly Competitive IndustryConsider Figure 34.1. Assume that the market described by the figure is perfectly competitive, andMC represents the horizontal summation of marginal cost curves and, therefore, the market supplycurve. Use Figure 34.1 to answer the following questions.Figure 34.1Perfect Competition12MC11109.32-1-1 2 3 4 56 7 8 9 10 11 12QUANTITY1. What quantity of output will be produced?2. What price will the market establish?3. Calculate the amount of the consumer surplus. Darkly shade the area of consumer surplus.4. Calculate the amount of the producer surplus. Lightly shade the area of producer surplus.COSTS/REVENUE

Here, the market graph of a monopolist is given in which MR, MC, ATC and sand curve is given.

Equilibrium for the Monopolist Now consider the same demand and cost curves, but assume the market is a monopoly. Therefore, MR represents the monopolist's marginal revenue curve and MC represents the monopolist's marginal cost curve. Using Figure 34.2, answer the following questions. X Figure 34.2 Monopoly 12 MC 11 10 ATC 9. 3 1. MR 3 4 5 8 9 10 11 12 QUANTITY 5. What quantity of output will be produced? Why? 6. What price will the monopolist establish?. Why? 7. Calculate the amount of the consumer surplus. Darkly shade the area of consumer surplus. 8. Calculate the amount of the producer surplus. Lightly shade the area of producer surplus. COSTS/REVENUE B76

Equilibrium for the Monopolist Now consider the same demand and cost curves, but assume the market is a monopoly. Therefore, MR represents the monopolist's marginal revenue curve and MC represents the monopolist's marginal cost curve. Using Figure 34.2, answer the following questions. X Figure 34.2 Monopoly 12 MC 11 10 ATC 9. 3 1. MR 3 4 5 8 9 10 11 12 QUANTITY 5. What quantity of output will be produced? Why? 6. What price will the monopolist establish?. Why? 7. Calculate the amount of the consumer surplus. Darkly shade the area of consumer surplus. 8. Calculate the amount of the producer surplus. Lightly shade the area of producer surplus. COSTS/REVENUE B76

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...

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