TR MR AC (ATC) TC MC Profit +/- 0. $170 $95 $160 $195 2. $150 $145 3. $140 $127 4. $130 $116.25 $120 $109 $110 $105 $100 $104 8. $90 $103.75 6. $80 $105 10 $70 $107 Refer to Monopoly table above. The natural (pure) monopoly will earn the following: O a. profit of 39 Ob. profit of 1o Oc. loss of 28 O d. profit of 30 O e. profit of 55

TR MR AC (ATC) TC MC Profit +/- 0. $170 $95 $160 $195 2. $150 $145 3. $140 $127 4. $130 $116.25 $120 $109 $110 $105 $100 $104 8. $90 $103.75 6. $80 $105 10 $70 $107 Refer to Monopoly table above. The natural (pure) monopoly will earn the following: O a. profit of 39 Ob. profit of 1o Oc. loss of 28 O d. profit of 30 O e. profit of 55

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter9: Monopoly

Section: Chapter Questions

Problem 7SQP

See similar textbooks

Similar questions

If public utilities are a natural monopoly, what would be the danger in deregulating them?
What is the usual shape of a marginal revenue cuwe for a monopolist? Why?
Draw the demand curve, marginal revenue, and marginal cost curves from Figure 9.6, and identify the quantity of output the monopoly wishes to supply and the price it will charge. Suppose demand for the monopolys product increases dramatically. Draw the new demand me. What happens to the marginal revenue as a result of the increase in demand? What happens to the marginal cost curve? Identify the new profit-maximizing quantity and price. Does the answer make sense to you? Figure 9.6 Illustrating Profits at the HealthPill Monolpoly
What are some of the benefits of the deregulation?
Why would a firm choose to use one or more of the anticompetitive practices described in Regulating Anticompetitive Behavior?
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
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.
Classify the following as a government-enforced barrier to entry, a banker to entry that is not government-enforced, or a situation that does not involve a barrier to entry. A patented invention A popular but easily copied restaurant recipe An industry where economies of scale are very small compared to the size of demand in the market A well-established reputation for slashing prices in response to new entry A well-respected brand name that has been carefully built up over many years
Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?
If the transit system were regulated to operate with no subsidy (i.e., at zero economic profit), what approximate output would it supply and what approximate price would it charge?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Classify the following as a government-enforced barrier to entry, a banker to entry that is not government enforced, or a situation that does not involve a barrier to entry. A City passes a law on how many licenses it will issue for taxicabs A city passes a law that all taxicab drivers must pass a driving safety test and have insurance A well-known trademark Owning a spring that offers very pure water An industry where economies of scale are very large compared to the size of demand in the market