Microeconomics (Book Only)
12th Edition
ISBN: 9781285738307
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 10, Problem 6QP
To determine
The condition in which
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The MR curve of a perfectly competitive firm is (Click to select) and the MR curve of a monopoly firm is (Click to select)
Explain in steps
Suppose a perfectly competitive industry can produce a product with total cost TC = Q? and the market
demand for the product is given by Q = 120 - Suppose that the same market can be served by a
monopolist operates with the same cost and demand functions. How does the consumer surplus change
due to monopoly relative to perfect competition?
It falls by 2000
It does not change
It falls by 1600
It falls by 1200
Chapter 10 Solutions
Microeconomics (Book Only)
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.3 - Prob. 4STCh. 10.5 - Prob. 1STCh. 10.5 - Prob. 2STCh. 10.5 - Prob. 3ST
Ch. 10 - Prob. 1VQPCh. 10 - Prob. 2VQPCh. 10 - Prob. 3VQPCh. 10 - Prob. 4VQPCh. 10 - Prob. 5VQPCh. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Is there a deadweight loss if a firm produces the...Ch. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNG
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- please do the graphs and the questions. the choices for the two questions in the end are (monopoly, perfectly competitive market) thank youarrow_forwardSuppose the long-run marginal cost for a firm is given by MC= x^2 - 2x+5 , where x is the quantity supplied by the firm. Demand for the industry’s product is given by Q= 200-2p, where Q is quantity demanded and p is price. Consider two possibilities: (1) The industry is perfectly competitive ,or (2) the industry is an unnatural monopoly that operates at a single price. (a) What will the amounts of firm and industry output (x, Q) be under each form of industrial organization? (b) How much would a firm be willing to pay to obtain the right to act as a monopoly in this industry? Please show your work. (c) What is the dollar amount of deadweight loss from the monopoly? Please show work for each part.arrow_forwardShow in stepsarrow_forward
- Below is the demand schedule for wholesale pallets of ice cream. Assume that the marginal cost of supplying a wholesale pallet of ice cream is a flat $40 per pallet. Price Quantity Total Revenue Total Cost Profit $100 40 $90 50 $80 60 $70 70 $60 80 $50 90 $40 100 First, complete the table above for TR, TC, and profit. If this were a competitive industry, where P=MC, what would be the price and quantity of wholesale ice cream? If ice cream were supplied instead by a profit-maximizing monopoly, what would be the price and quantity? If Ben and Jerry were to form a collusive duopoly for the production of ice cream, what would be the price and industry quantity? If Ben and Jerry split the market in d. evenly, what would be the output and profit for each of them? What if Ben were to cheat on the cartel and produce a higher output by 10 pallets: What is Ben’s resulting output…arrow_forwardUsing graphs, describe how price and output decisions are made under:a) Perfect competitionb) Monopoly Describe the concept of economic profit and how such profits can occur under each of the markets described abovearrow_forwardThe optimal level of production for any company is the level of production that either maximizes profits or minimizes losses. How does one determine the optimal level of production for any business? Explain. Explain why a company would shut down in the short run. Explain how a company could choose to get bigger, yet lower their average costs? What are the major characteristics of a firm competing under conditions of perfect competition? What are the major characteristics of a firm competing under conditions of monopoly? How does a demand curve differ in perfect competition from a demand curve in a monopoly? Name an example of a local monopoly?arrow_forward
- Which of the following can make a positive profit in the short run? A perfectly competitive firm A monopoly . Both A and Barrow_forwardIf the price is P, the firm in a perfectly competitive market is making a profit when producing the profit maximizing quantity Q1. Why would this situation lead to new entrants? Why would this increase in the number of firms competing in the market lead this firm to reduce output to Q (depicted in the right panel)? INDUSTRY S S¹ FIRM Costs - Revenue MC ATC K P P AR = MR ــة p1 Q Q¹ Use the editor to format your answer Outputarrow_forwardThe fastfood industry can be considered a perfectly competitive industry between two competitive firms: Jollibee and McDonalds. The total cost function of one of the firms is expressed by C(Q) = 100 + 4Q2, and demand is P = 80 – 4Q Find the equilibrium price and total quantity that the industry produces. Suppose that Jollibee successfully acquired McDonalds through a hostile takeover. What would be the new equilibrium price and quantity if MR = 80 – 4Q? Is this hostile takeover beneficial?arrow_forward
- Suppose that you are a manager for a firm like EBC Brakes, which manufactures brakes for automobiles and motorcycles. Your company has two plants, one in the United States and the other in the United Kingdom. The following tables include estimated demand and marginal revenue for your brakes, along with the marginal costs at the two factories. what quantity and price maximize your firms profit? What is the profit – maximizing number of brakes produced in the U.S. plant? In the U.K. plant? Quantity Demanded (brakes per hour) Price (dollars per brake) Quantity Produced in the U.K. plant (brakes per hour) Quantity Produced in the U.S. (brakes per hour) Total Quantity Produced Marginal Cost (dollars per brake) Marginal Revenue (dollars per brake) 104 196 47 42 89 66 92 105 195 48 44 92 68 90 106 194 49 46 95 70 88 107 193 50 48 98 72 86 108 192 51 50 101 74 84 109 191 52 52 104…arrow_forwardThe following table displays the average cost of producing a good at different levels of output in the long run. Output (units) Average Cost ($) 940 190 980 140 1,020 120 1,060 110 1,100 110 1,140 125 1,180 145 if all the firms in the market have the same LRAC curve, what is the minimum level of output needed for a low-cost firm to compete in the market? Write the exact answer. Do not round.arrow_forwardQuestion 2 (10 points) "Because a monopoly is the only source of supply, the firm is not constrained by the market demand curve. There is no limit to the price the monopoly can charge. On the other hand, a perfectly competitive firm is constrained by the market demand" Evaluate the statement.arrow_forward
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