Question 8 of 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $600 per $2,400 unit of output. This firm has a fixed cost equal to $3,600. Use 2,200 this information to determine the profit-maximizing output Marginal cost 2,000 and profit for this firm. 1,800 What is the profit-maximizing output of this purely Average total cost 1,600 competitive firm? Round your answer to the nearest 1,400 whole number. 1,200 1,000 Average variable cost 800 profit-maximizing output = units of output 600 Marginal revenue 400 200 What is the maximum level of profits for this purely 1 2 3 4 5 6 7 10 11 12 13 14 15 competitive firm? Round your answer to the nearest positive Units of output or negative integer. maximum level of profits = $

Question 8 of 20 The graph presents the costs and revenue for a purely Cost and revenue competitive firm, where the market price is equal to $600 per $2,400 unit of output. This firm has a fixed cost equal to $3,600. Use 2,200 this information to determine the profit-maximizing output Marginal cost 2,000 and profit for this firm. 1,800 What is the profit-maximizing output of this purely Average total cost 1,600 competitive firm? Round your answer to the nearest 1,400 whole number. 1,200 1,000 Average variable cost 800 profit-maximizing output = units of output 600 Marginal revenue 400 200 What is the maximum level of profits for this purely 1 2 3 4 5 6 7 10 11 12 13 14 15 competitive firm? Round your answer to the nearest positive Units of output or negative integer. maximum level of profits = $

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 2WNG

See similar textbooks

Similar questions

Return to Figure 9.2. Suppose P0 is 10 and P1 is 11. Suppose a new firm with the same LRAC curve as the incumbent tries to bleak into the market by selling 4,000 units of output. Estimate from the graph what the new firms average cost of producing output would be. If the incumbent continues. to produce 6,000 units, how much output would the two films supply to the market? Estimate what would happen to the market price as a result of the supply of both the incumbent firm and the new entrant. Approximately how much profit would each firm earn? Figure 9.2 Economics of Scale and Natural Monoploy
Suppose demand for a monopolys product falls 50 that its profit-maximizing price is below average variable cost. How much output should the film supply? Hint: Draw the graph.
Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firmâ€”Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.
How is the perceived demand curve for a monopolistically competitive film different from the perceived demand curve for a monopoly or a perfectly competitive film?
Is a monopolist a price taker? Explain briefly.
What is predatory pricing? How might it reduce competition, and why might it be difficult to tell when it should be illegal?
1.Explain under each of the situation, a firm working under a perfectly competitive market would keep on producing or shut down. Show using diagram and also explain the condition thoroughly. a. P=14: AC=16: AVC=10 and O=40 b. P=10; AC=10; AVC=8 and Q=20 2.Show using the same dagram for both monopoly and porfect competition make sructure the consumer surplus of each market and how tlirisuhia secking lbe incrme is destributed and the 10 marks deadweight loss expetienced. Explaineyour Owa words.
Assume that the demand for electric cars is p = 100-q (where q is the quantity and p is the price), and that an innovation can reduce the constant marginal cost of production from 70 to 60. What is the definition of nondrastic/drastic innovation? Confirm that the innovation for electric cars is nondrastic. Show that marginalcost would have to be reduced to less than 40 for theinnovation to bedrastic. Suppose that the industry is a monopoly (not threatened by entry). Howmuch is this firm willing to pay to acquire the innovation?
Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal revenue, and marginal cost curves: Demand: P=60−QP=60−Q Marginal Revenue: MR=60−2QMR=60−2Q Marginal Cost: MC=QMC=Q On the following graph, use the blue line (circle symbol) to graph Mr. Potter's demand curve. Then, use the black line (cross symbol) to graph his marginal revenue (MR) curve. Next, use the orange line (square symbol) to graph his marginal cost (MC) curve. Finally, use the grey point (star symbol) to indicate the profit-maximizing price and quantity. : The profit-maximizing quantity is___units, and the profit-maximizing price is___. Mayor George Bailey, concerned about water consumers, is considering a price ceiling that is 10% below the monopoly price. At this new price, the quantity demanded would be___units. At this quantity, the marginal cost would be___the price. Therefore, the profit-maximizing Mr. Potter___produce…
For each of the following pairs of firms, explainwhich firm would be more likely to engage inadvertising.a. a family-owned farm or a family-ownedrestaurantb. a manufacturer of forklifts or a manufacturer of carsc. a company that invented a very comfortable razoror a company that invented a less comfortable razor
Sid is the CEO of a local power plant operating in monopoly market structure. Explain why the demand curve (P) here is larger than the MR, and why Sid won’t produce on the inelastic portion of demand curve. Draw a graph comparing Sid’s market structure with a market in perfect competition (on the same graph). Be sure to label the components of deadweight loss. On a separate graph, show the case where the monopoly is making a positive profit and label the profit area.
COURSE: MICROECONOMICS - PERFECT COMPETITION AND MONOPOLY (RESUBMITION QUESTION) We appreciate a perfect competition market where there is a predetermined limit number of firms with 20 total firms.Each has the cost function such that: CTi = qi2 + 4qi + 3 where qi indicates numbers of firms (i = 20) The demand in the market is: Q = 100 - 4pa) What is the individual supply of each firm?b) What is the supply of the whole industry?c) Obtain the market equilibriumIn the case where a new firm intended to enter a monopolist's market:(a) What kind of legitimate entry barriers can the firm face understanding the nature of the market it wishes to enter?b) What type of anticompetitive barriers could the firm already in the market present?