In a bilateral monopoly, suppose we have the following information: P = 1000 - 2Q (Demand) P = 100 + 8Q (Supply) %3D MR = 1000 - 4Q %3D MC = 100 + 16Q What would the price be in the unrestrained monopsony equilibrium using this information?
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- Assuming that the firm is the only producer in a market, the social cost of the output decision of a profit-maximizing monopoly firm. Can you discuss the concept of social cost in terms of the output decision of the monopoly firm? Thank you!Assuming that the firm is the only producer in a market, the social cost of the output decision of a profit-maximizing monopoly firm. Can you discuss the assumption that the government forces the monopoly firm to lower its price? Would it be possible to show how the output of the firm would increase? Thank you!Assuming that the firm is the only producer in a market, the social cost of the output decision of a profit-maximizing monopoly firm. Can you discuss the assumption that the government wants to set a price ceiling that maximizes the monopolist's output? What price should the government set? Thank you!
- Is the creation of a monopoly power due to the absence of government intervention in the market? If so whyProvide one example when the monopoly power leads to a dead weight loss, and one example when it does not. ExplainDeprive monopoly demand for an input when several inputs are used in the production process?
- The ultimate determinant of monopoly power is the firm’s elasticity of demand. What three factors determine a firm’s elasticity of demand? Explain this in the context of a South African example of a monopoly. How should a monopsonist decide how much of a product to buy? Will it buy more or less than a competitive buyer? Explain.Two countries, both having a monopoly on Y, decide to engage in trade. Graphically illustrate and discuss the welfare effects on country H when the monopoly in country H has a relatively lower cost structure than country F.Two countries, both having a monopoly on Y, decide to engage in trade. Graphically illustrate and discuss the welfare effects on country H when the monopoly in country H has a relatively higher cost structure than country F.
- In a pure monopoly, modern technology means that some industries can only achieve efficient and low-cost production if the producers are extremely large: 1. in relation to the market and in absolute terms 2. regardless of the market 3. in absolute terms 4. relative to the marketConsider a monopoly with a total cost function given by TC = Q2 + 100 and facing the market demand function given by Q = 120 – P. If the government imposes a specific tax of 20 per unit of output, calculate the change in the monopoly’s profit given this tax policy. Using your calculated values, graphically illustrate the change in the over-all societal welfare with the imposition of the tax.Q37 A monopoly is distinguished from a firm operating under any other market structure in that the monopoly... a. Faces a demand curve which is identical to the market demand curve. b. Charges a price higher than its average revenue. c. Can choose its level of cost. d. Can choose its output level. e. Does not produce at a profit-maximizing level of output.