Microeconomics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453569
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 10, Problem 6CQ
To determine
Style and quality competition in the market.
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It is often said that a competitive market is more beneficial for the consumers as compared to the monopoly market. Why ? Explain.
Please submit the answer and then watch the video feedback.Farmer Ted sells 1,000 bushels of wheat at a price of $5 per bushel in a competitive market. Wilma sells 5 gallons of water at a price of $5 per gallon in a monopoly market. If both Farmer Ted and Wilma want to sell a higher quantity, what happens to their respective prices?
a.Farmer Ted's price remains constant and Wilma's price decreases.
b.Farmer Ted's price decreases and Wilma's price remains constant.
c.Farmer Ted's price remains constant and Wilma's price increases.
d.Both Farmer Ted's and Wilma's prices decrease.
“Florida orange growers” advertise as a group, but individual orange growers do not. What does this fact suggest about the market for oranges? Why?
Chapter 10 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- The limits of agritourism extend further and further in the contemporary world. Think if there are phenomena verging on agritourism in your country or region. If so, define them. Think if they are used for business. How do farmers andhow to tourists benefit from the extension of the limits?arrow_forwardWho said “The customer experience is the next competitive battleground” ?arrow_forwardpolicies government can have in place to increase perfect competition in the marketarrow_forward
- The graph below shows the daily demand curve for fresh spring water in a remote mountain village in the land of Far Country. The only spring is controlled by the village chief who earns revenue from the sale of water in order to cover the costs of running the village. The villagers bring their own jugs and pay a price per jug as they leave. a. What quantity of jugs would be sold each day in order to maximize his total revenue? Quantity: b. What price would the chief charge? Price: $ c. What is MR at this price and quantity? MR: d. Assuming no marginal costs, what price would the chief charge in order to maximize his total profits? Price: $arrow_forwardIf occupational safety laws were changed so that firms no longer had to take expensive steps to meet regulatory requirements, we would expect a.competition to force producers to pass the lower production costs on to consumers in the long run. b.the firms in the industry to make long-run economic profit. c.the market price of the products of this industry to decrease in the short run but not in the long run. d.the demand for the products of this industry to increase.arrow_forwardWhether in the case of clothes and cars or in the case of universities, producers spend a lot of money establishing their "brand names" because: Group of answer choices Brand names are established by driving out the competition, after which these companies charge monopoly prices. Government legislation raises the prices of brand named items with price controls, and people have no choice but to pay the higher price for brand name products. There are legal requirements for companies with brand names to spend a percentage of their budget on advertising. Brand names carry a reputation of better quality, and consumers will pay a higher price for brand names.arrow_forward
- What are the differences between copyright and counterfeiting? Using examples, examine the reasons why marketing strategies fail in the international markets?arrow_forwardHow does market power or monopoly subvert the coordinating function of market prices?arrow_forwardPic 1 : You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price Adults Children (Dollars) (Tickets) (Tickets) 10 0 0 9 100 0 8 200 0 7 300 0 6 300 0 5 300 100 4 300 200 3 300 200 2 300 200 1 300 200 0 300 200 To maximize profit, you would charge $ ? for an adult's ticket and $ ? for a child's ticket. Total profit in this case would be $ ? The city council passes a law prohibiting you from charging different prices to different customers. Now you set a price of $ ? for all tickets, resulting in $ ? in profit. Pic 2 : Indicate whether each of the following groups of people is better off, worse off, or the same because of the law prohibiting price discrimination.…arrow_forward
- You live in a town with 300 Adults and 200 children, and you arc thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customer: a. To maximize profit, what price would you charge for an adult ticket? For a child's ticket?How much profit do you make?b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make?c. Who is worse off because of the law prohibiting price discrimination? Who is better off? (If you can, quantify the changes in welfare.)d. If the fixed cost of the play were $2,500 rather than $2,000, how would your answers to parts (a), (b), and (c) change?arrow_forwardA commodity has a demand of Q = 30 - P and a supply of Q = -4 + P. 1. draw a graph that shows the market equilibrium for each of the following cases: A. A competitive market B. A monopolist sells the product to consumers. C. A monopsonist purchases the product from producers. please label clearly all the curves that you draw and the prices and quantities for each of the three cases.arrow_forwardDistinguish between technical efficiency and economic efficiencyarrow_forward
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