EBK MICROECONOMICS
2nd Edition
ISBN: 9780134458496
Author: List
Publisher: VST
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Question
Chapter 12, Problem 1P
(a)
To determine
The process by which two companies can convince the department of justice and federal communications commission to allow the merger of these two satellite providers in U.S..
(b)
To determine
The reason by which DuPont can convince the supreme court to not violate the Sherman Act.
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From our textbook and in your own words, define what a monopoly is. In your response, address the following: What are some disadvantages and advantages of a monopoly compared to brand competition? Is there a trend toward consolidation in some markets, and if so, what does that mean to you, the consumer? What is better for you, the consumer, monopoly, or brand competition? Please use current research in your response. Here are some ideas that might help you get started. Ninety-two percent of the prescription drugs sold in the United States come from just three wholesalers. Coke owns over 200 brands, including names like Schweppes, Dr. Pepper, Fanta, and Powerade. Nestle owns over 2,000 brands. Hospital consolidation has.
Let's say that you are looking at a table with output and cost data for a monopoly and you observe the following:At a quantity of 300 units, the firm's marginal cost and marginal revenue both equal $2.40.At a quantity of 400 units, the firm's marginal cost reaches its lowest point at $1.80.At a quantity of 500 units, the firm's average total cost reaches a minimum of $2.00.At a quantity of 600 units, the firm's marginal cost and marginal revenue both equal $2.40 again. At a quantity of 700 units, the firm's marginal cost is $5.00 and its marginal revenue is $3.00.If this firm wants to maximize its profits, which quantity should it produce? Explain your answer please.
Consider the local cable company, a natural monopoly. The following graph shows the monthly demand curve for cable services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves.
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- Imagine that the graph below shows a pharmaceutical firm's D, MR, and MC curves. The firm operates as a profit-maximizing monopoly. 420 400 380 360 340 320 300 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 0 50 100 MR 150 200 250 300 MC D 350 400 If the ATC is the same as the MC (there are no other costs), what is the pharmaceutical firm's total profit? -450arrow_forwardThe following graph shows the D, MR, and MC curves facing a Monopoly. If this firm finds itself producing 225 units, what should the firm do to its output level? $14 $12 $10 $6 $2 $0. 50 100 A. Decrease output to 200 units B. Increase output to 250 units C. Decrease output to 175 units D. No Change 150 200- 250 MC D MR 300 350arrow_forwardThe above table provides some data for a monopoly firm. What is the profit maximizing point of production for this firm? Assume that the firm can only produce and sell whole units (discrete case). Price Quantity Demanded Total Cost $40 1 $270 35 2 280 30 3 295 25 4 320 20 5 360 A. 1 B. 2 C. 3 D. 4 E. 5arrow_forward
- 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?arrow_forwardI already have a clue how I would answer this question, but Pearson is very particular with how I label and draw the correct points. Could you help me, please?arrow_forwardDogarrow_forward
- Consider the following firms. Would you regard any of them as a monopoly? Why or why not? Could you use the monopoly model in analyzing the choices of any of them? Explain. the best restaurant in town your barber or beautician your local cable company your campus bookstore Microsoft Amtrak the United States Postal Servicearrow_forwardConsider the only internet service provider in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for internet services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. PRICE (Dollars per subscription) 100 90 80 70 40 20 10 0 0 2 || Pricing Mechanism Profit Maximization 4 Complete the first row of the following table. MR 8 10 12 14 QUANTITY (Thousands of subscriptions) Marginal-Cost Pricing Average-Cost Pricing O True Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. O False 16 ATC -MC Complete the third row of the previous table. 18 20 D Short Run Price Quantity (Subscriptions) (Dollars per subscription) Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Profit Complete the second row of the…arrow_forwardJudge Thomas Penfield Jackson finds that Microsoft is a relentless and predatory monopolist.Judge Jackson says that: Microsoft established and maintained the Windows monopoly by using the "applications barrier to entry," which gives Microsoft enduring monopoly power. Microsoft harnesses independent software vendors to create products that take advantage of new application program interfaces (APIs) built into each release of Windows. Gives PC makers no choice but to install the new operating system, at whatever price Microsoft decrees. Microsoft maintains that it has sought only to innovate, serve customers, and protect its intellectualproperty. Microsoft says that it is not a monopoly because: It competes with itself by continually releasing "new and improved" versions of Windows. Technological change will ensure that any dominance it enjoys is fragile. Already, "middleware" (applications like RealNetworks) have their own APIs, which new and existing applications might hook on to…arrow_forward
- The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly. Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above?arrow_forwardConsider the only electric company in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for electricity services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. PRICE (Dollars per subscription 100 90 80 10 0 0 2 MR 8 11 4 10 12 14 QUANTITY (Thousands of subscriptions) 16 ATC MC 18 20 (?)arrow_forward
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