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.

In many countries, the government chooses to "internalize" the monopoly by owning monopoly providers of goods and services. (In some cases these firms are "nationalized" and the government actually buys or confiscates firms that operate in monopoly markets). Explain TWO advantages and TWO disadvantages of such an approach

12. You’ve been hired as a consultant by a monopoly. You discover that the demand curve facing the monopoly is given by P = 80-Q and MC = 3Q. The firm is currently charging a price of $60. Using this information and a carefully drawn and labeled diagram and assuming that the firm should remain open, explain what the firm should do and why.

#4 please

Natural monopoly is inefficient as it charges a price higher than marginal cost. Is it feasible for the government to regulate the monopoly by setting a price equal to marginal cost? Explain with a diagram.

Provide an example of a cost function for which a natural monopoly exists. Why might we want to allow natural monopolies to exist (e.g. how might social welfare benefit from such a monopoly)?

The following diagram illustrates the demand curve facing a monopoly in an industry with no economies or diseconomies of scale and no fixed costs. In the short and long run, MC = ATC. 1.) Using the point drawing tool, indicate the monopoly output and monopoly price (Monopoly) in the figure to the right. Attach the appropriate provided label. 2.) Using the rectangle drawing tool, shade in monopoly profits (Profit). Attach the appropriate provided label. 3.) Using the triangle drawing tool, shade in the "excess burden" or "welfare costs" of the monopoly (Excess burden). Attach the appropriate provided label. Note: Carefully follow the instructions above and only draw the required objects. The monopoly creates excess burden because A. it produces where marginal cost is positive. B. it produces where price equals marginal cost. OC. it produces an inefficiently large amount of output. D. it produces where price is above marginal cost. E. it charges a price that is too low. Click the graph,…

How does monopoly compare with pure competition in terms of price, output, and efficiency? Explain.

The following graph depicts the demand (D), marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves for a firm operating as a natural monopoly. Costs and Revenues (dollars) 80 70 60 50 40 30 20 10 0 Market for a Natural Monopoly MC Quantity and ATC MR 10 20 30 40 50 60 70 80 90 100 D B ↑ Instructions: Enter your answers as a whole number. a. If the firm is operating as a natural monopoly, what is the profit-maximizing level of output and price charged to consumers? $ units will be sold b. At what price would the firm earn a normal profit? c. Suppose the government regulated the monopoly such that it were required to charge the perfectly competitive price. What is the regulated price?

Suppose a local cable company provides cable service to a rural community. The figure to the right illustrates the cable company's marginal cost of providing cable service along with the community's demand for cable TV. Assume the local cable company is a monopoly. When the company maximizes profits, consumer surplus equals $ (enter a numeric response using a real number rounded to one decimal place), and producer surplus equals $ Compared to the perfectly competitive market outcome, the cable company creates dead weight loss equal to $ Price and cost (dollars per cable subscription) 120- 110- 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- to 10 20 MR D 30 40 50 60 70 80 Quantity of cable subscriptions MC 90 100 ON