If the government forces a natural monopoly to produce the output where P= MC, the firm: Group of answer choices A-All of the responses here are correct. B-Will fail to produce efficiently. C-Will incur loses. D-Will be producing less than the profit- maximizing level of output.

If the government forces a natural monopoly to produce the output where P= MC, the firm: Group of answer choices A-All of the responses here are correct. B-Will fail to produce efficiently. C-Will incur loses. D-Will be producing less than the profit- maximizing level of output.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter9: Monopoly

Section: Chapter Questions

Problem 1QFR

See similar textbooks

Related questions

Q: A monopolist faces two consumers with individual demands q,(p) = 100 – p and q2(p) = 100 –: when…

A: In economics, the marginal cost is the change in the total cost that arises when the quantity…

Q: Suppose a competitive market with the inverse demand p = 100 - q. An innovation reduces the constant…

A: Given the information: Inverse demand, P = 100 - q Reduction in marginal production, 75 to 60.

Q: Consider a monopoly firm that produces diamonds. This firm sells in two distinct markets, one is…

A: The firm maximizes profit by practicing third degree price discrimination in both markets

Q: A cafeteria is a monopoly for lunches served at a school. A typical student has the demand function…

A: Monopoly is a single supplier of the product with no close substitutes. So, it constitutes the…

Q: A monopoly is characterized by all of the following except there are only a few sellers each…

A: A monopoly market is one that has only a single seller and the product that is sold has no close…

Q: We get a natural monopoly if the production of a good benefits from: a)Patent Protection…

A: Natural monopoly is a type of monopoly in which high start up costs is required.

Q: You are given the following: C = 1.5Q +20Q+ 50 and p= 120 - 1Q where Q is output, p is price, and C…

A: C = 1.5Q2 + 20Q + 50 P = 120 - 1Q

Q: The market demand function faced by an monopoly manufacturer is P=1000–10Q, and the manufacturer's…

A: Monopoly refers to the market structure which has a single seller, selling the good that has no…

Q: The Spacing Guild has a monopoly on space transport. They sell tickets (Q) for seats on starships…

A: a market in which there is only one single seller is called monopoly.

Q: A monopoly has an inverse demand curve given by p=20−Q and a constant marginal cost of $2.…

A: Deadweight loss is the loss in social welfare resulting when socially efficient quantity is…

Q: Which of the following is not a characteristic of a monopoly? A. the demand curve is…

A: In a monopoly, marginal revenue curve lies below the demand curve because the firm has to lower the…

Q: If the government determines that a natural monopoly must set a price equal to its average cost plus…

A: A monopoly refers to a sole seller of a unique product. A natural monopoly refers to one that…

Q: A monopoly: O A) always makes a profit. B) is characterized by a single seller who produces a…

A: A substitute product is a product that is used for the same purposes or to satisfy the similar need…

Q: If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then the…

A: the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then the…

Q: Suppose that a monopoly faces the following demand P = 100-Q Further, assume that the fixed costs…

A: Profit = Total Revenue - Total Cost Total Revenue = Price*Quantity Total Cost is already given to…

Q: If a monopoly firm sells a product with price $100, whose marginal cost is $30, what is the price/…

A: Please find the answer below.

Q: A monopoly is faced with a linear demand, given by P = 120 -2Q. P is the price and Q is the…

A: Welfare in the market = Consumer surplus + Producer surplus

Q: Total revenue is in dollars and x is the number of units. Suppose that in a monopoly market, the…

A: a) Demand function : p= 480-0.1x Total revenue = Price x Quantity Units sold, x = 500 Therefore,…

Q: Which is the correct statement? A natural monopoly implies that: a. Economies of scale are of…

A: A natural monopoly is an economic situation when high initial costs and powerful economies of scale…

Q: A risk-neutral monopoly must set output before it knows the market price. There is a 50 percent…

A: A monopolistic market is one in which a product is produced solely by one company. One of the…

Q: A monopoly regulated by the state under the criterion of maximising social welfare (economic…

A: Meaning of Monopoly: The term monopoly refers to the situation under which there is only an…

Q: profit maximizing price (P) for this monopoly

A: Profit maximization condition for monopoly: MR = MC where, MR is Marginal Revenue MC is Marginal…

Q: Suppose a monopoly firm with a constant marginal cost 10 faces an inverse linear demand function p =…

A: Monopoly is a single seller in the market producing unique good. This gives it market power to…

Q: A monopoly producer usually earns normal profits True/False

A: According to the given question In monopoly type of the market there is only the sole seller or…

Q: . A monopoly is currently producing an output level where P = $30, MR = $20, AVC = $16, AC = $24,…

A: Monopoly Monopoly refers to a market in which there is only one single seller. Due to high hurdles…

Q: A firm with Perfect Competition in the Labour Market and Monopoly in the Output Market. (Short Run)…

A: Product market is the market in which final goods are exchanged between the firms and the household…

Q: Consider a monopoly with demand P= 7000-Q The cost function for the firm operating in this market…

A: Given demand function- P = 7000 - Q Given cost function- C(Q) = Q2

Q: A monopoly is considering selling several units of a homogeneous product as a single package. A…

A: Monopoly is a market structure with only one producer and many consumers. Under monopoly the…

Q: Consider a monopoly firm that produces diamonds. This firm sells in two distinct markets, one is…

A: The act of charging different prices in different markets to increase the profits is referred to as…

Q: In a monopoly situation, the equation for the demand for a certain commodity in dollars per unit is…

A: The monopoly is that market structure which has a single seller and infinite buyers, who has…

Q: Suppose a monopolist faces a demand curve D(p) = 10 - P. It has no variable cost, but it incurs a…

A: Demand function : D(p) = 10 - P Quasi fixed Cost = 9 Profit function = P*Q - 9

Q: A monopoly firm's demand curve is given as P = 10,010 – 50Q. The monopoly firm produces output at a…

A: Deadweight loss is also known as DWL refers to the loss of economic efficiency when the equilibrium…

Q: Economic efficiency requires that a natural monopoly&#39;s price be equal to average total cost…

A: The natural monopoly is one of the type of monopoly in which the average cost of the firm keeps on…

Q: A monopoly sells to a market with demand ?(p) = 100/p2 and has a cost ?(q) = q. (a) Find the…

A: Ans. Under Monopoly Market, the profit maximization level is where MR = MC At this level, a…

Q: Consider a situation when the producer is a monopolist. Assume that the market demand is P=20-Q. The…

A: Answer- Need to find- Consider a situation when the producer is a monopolist. Assume that the market…

Q: If, in a monopoly market, the demand function for a product is p = 160 − 0.10x and the revenue…

A: Demand function shows the functional relationship between Quantity demanded for a commodity and its…

Q: Total revenue is in dollars and x is the number of units. Suppose that in a monopoly market, the…

A: The total revenue is given by the product of price and quantity. Marginal revenue is nothing but the…

Q: A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an…

A: Monopoly is a form of market organization in which a single firm sells a commodity for which there…

Q: The monthly demand function for a product sold by a monopoly is p=1960-1/3x2 dollars, and the…

A: Demand Function: p = 1960 - 13x2 Average Cost Function: c = 1000 + x2 + x2c = 1000 + 2x2 Total Cost…

Q: A monopolist faces the inverse daily demand curve P = 20 – 0.005Q, and has the total cost curve C(Q)…

A: Monopoly profit-maximizing output is where marginal revenue equals marginal cost

Q: Under monopoly, a firm: Question 18 options: A) is a price taker. B) maximizes profit by…

A: Note: Since you've asked multiple question, we will solve the first question for you. If you want…

Q: A monopoly can use one of two alternative technologies. One technology requires 10 units of capital…

A: Monopolies are businesses that have complete control of an industry or a specialised sector to the…

Q: For a monopoly firm, the demand equation is P = 10 –3Q, marginal revenue is MR = 18 - 4Q, marginal…

A: Given: P = 10 –3Q ...........(i) MR = 18 - 4Q ..........(ii) MC = 2Q ...........(iii)

Question

If the government forces a natural
monopoly to produce the output where P=
MC, the firm:
Group of answer choices
A-All of the responses here are correct.
B-Will fail to produce efficiently.
C-Will incur loses.
D-Will be producing less than the profit-
maximizing level of output.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

For Group A the cost of attaining an educational level y is CA(y) = $6,000y and for Group B the cost of attaining that level is CB(y) = $10,000y. Employees will be offered $50,000 if they have where y* is an education threshold determined by the employer. They will be offered $130,000 if they have An employer who only wants to hire individuals who find learning less costly can do so by choosing y* to be anywhere between:
A Los Angeles firm uses a single input to produce a recreational commodity according to a production function f(x)=4x1/2, where x is the number of units of input. The price of the commodity is $100 per unit, and the input cost is $50 per unit. The fixed costs are zero. A: Write down the firm’s profit function. C:Find the profit maximizing amounts of input and output. What is the maximum profit? C:Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the price of its input is subsidized by $10 per unit. What is the new input and output levels? What is the new maximal profit?
A management team that is inefficiently utilising the companys scarce resources may find itself at risk of losing their jobs due to which of the following market mechanisms? A. Corporate regulators B. The market for corporate control C. Management shareholdings D. Management remuneration incentive packages E. Fishers separation theorem
A. Suppose the inverse demand curve in a market is D(p) =a-bp, where D(p) is the quantity demanded and p is the market price. Firm 1 is the leader and has a cost function c1(y1)=cy1 while firm 2 is the follower with a cost function c2(y2 )=. Firm 1 sets its price to maximise its profit. Firm 1 correctly forecasts that the follower takes the price leader’s chosen price as given (price taker) and chooses output so as to maximise its own profit. Write down the profit function of the follower. Calculate the profit maximising quantity that the follower selects given the leader’s chosen price p (i.e., calculate the follower’s supply curve S(p)). Interpret the solution to the profit maximising problem. B. The leader is facing the residual demand curve R(p)=D(p)-S(p) with D(p) and S(p) as defined in (c) above. Calculate the leader’s residual demand curve using the result in (b). Solve for p as a function of the leader’s output y1, i.e. the inverse demand function facing the leader. Write…
show the complete solution for Marginal profit = d(Profit)/dQ which is = 1.8Q - 0.12Q2 - 6
An effective manager must also consider the relative power of buyers and sellers, which of the following pertains to the rivalry that arises from the competition among firms selling the same product? a. consumer-consumer rivalry b. consumer-producer rivalry c. producer-producer rivalry d. government-producer rivalry
For the entry deterrence example we discussed today, [Market demand Q(p) = 100 p. the incumbent firm's marginal cost MC = 20, the entrant's marginal cost MC = 20] (A) The incumbent firm's strategy if F = 300 will be entry deterrence. (F is the Entrant's fixed entry cost.) (B) If F = 300 entry deterrence is socially optimal. * (A) is true; (B) is false (A) is false; (B) is true Both (A) and (B) are false Both (A) and (B) are true
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.
Economics An incumbent firm, Firm 1, faces a potential entrant, Firm 2, with a lower marginal cost LOADING... . The market demand curve LOADING... is p=220−q1−q2. Firm 1 has a constant marginal cost of $40 per unit, while Firm 2's is $10. Part 2 To block entry, the incumbent appeals to the government to require that the entrant incur extra costs. Part 3 Suppose that the legal intervention imposed by the government leaves the marginal cost alone (at $10 for Firm 2) but imposes a fixed cost. What is the minimal fixed cost that will prevent entry? Part 4 The minimum fixed cost (F) that will deter entry is F=$enter your response here.
Dear tutor, please solve these True/False Questions. Thank You! The telephone is an example of a product with network externalities. Because of market power, wages are higher under monopsony than under competitive conditions.
A move from point B to point A Select one: a. would be voluntarily accepted by neither Anita nor Roberta since each would be giving up something. b. would be Pareto optimal because it moves the society to the contract curve. c.would be voluntarily accepted by both Anita and Roberta. d.would be voluntarily accepted by Roberta but not by Anita.
If demand curver is given by Qd=400-8P and industry is dominaned by large firms with marginal cost of R10 where each firm has marginal cost of MC=10+50q where q is output of a typical fringe firm, what is the supply curve equation