Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 15, Problem 15.2.9PA
To determine
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1.Show how the diagram changes if there is an improvement in the technology of food production. Hint: this means that for a given number of hours’ work, Angela can produce more.
2-Given perfect competition show, on a diagram that profit maximisation implies marginal revenue = marginal cost = price. Briefly explain how and why this outcome differs from the equilibrium with the monopolist.
3-Show diagrammatically, and briefly discuss the contrast between outcomes in which a) Angela is Bruno’s slave and has no choice about how much to work; b) Angela has a reservation option and she can choose whether, and how much, to work, and Bruno makes a take-it-or-leave it offer of a fixed amount of rent (in terms of grain). Your answer should focus on i) differences in terms of Angela’s hours worked; ii) Pareto-efficiency vs fairness; iii) who gains from trade.
From the article: While Columbus Washboard appears to hold a monopoly, there arent indications it has used its market prowess todrive out rivals. Briefly explain why Columbus Washboard has not had to use its market prowess to drive out rival firms..
Use the following graph for a monopoly to answer the questions that follow.
What quantity will the monopoly produce, and what price will the monopoly charge?
Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge? How much output will the monopoly produce at this price? Will the monopoly make a profit if it charges this price?
Briefly explain.
Chapter 15 Solutions
Microeconomics (7th Edition)
Ch. 15 - Prob. 15.1.1RQCh. 15 - Prob. 15.1.2RQCh. 15 - Prob. 15.1.3PACh. 15 - Prob. 15.1.4PACh. 15 - Prob. 15.1.5PACh. 15 - Prob. 15.1.6PACh. 15 - Prob. 15.2.1RQCh. 15 - Prob. 15.2.2RQCh. 15 - Prob. 15.2.3RQCh. 15 - Prob. 15.2.4RQ
Ch. 15 - Prob. 15.2.5PACh. 15 - Prob. 15.2.6PACh. 15 - Prob. 15.2.7PACh. 15 - Prob. 15.2.8PACh. 15 - Prob. 15.2.9PACh. 15 - Prob. 15.2.10PACh. 15 - Prob. 15.2.11PACh. 15 - Prob. 15.2.12PACh. 15 - Prob. 15.2.13PACh. 15 - Prob. 15.3.1RQCh. 15 - Prob. 15.3.2RQCh. 15 - Prob. 15.3.3RQCh. 15 - Prob. 15.3.4PACh. 15 - Prob. 15.3.5PACh. 15 - Prob. 15.3.6PACh. 15 - Prob. 15.3.7PACh. 15 - Prob. 15.3.8PACh. 15 - Prob. 15.3.9PACh. 15 - Prob. 15.3.10PACh. 15 - Prob. 15.4.1RQCh. 15 - Prob. 15.4.2RQCh. 15 - Prob. 15.4.3PACh. 15 - Prob. 15.4.4PACh. 15 - Prob. 15.4.5PACh. 15 - Prob. 15.4.6PACh. 15 - Prob. 15.4.7PACh. 15 - Prob. 15.5.1RQCh. 15 - Prob. 15.5.2RQCh. 15 - Prob. 15.5.3RQCh. 15 - Prob. 15.5.4PACh. 15 - Prob. 15.5.5PACh. 15 - Prob. 15.5.6PACh. 15 - Prob. 15.5.7PACh. 15 - Prob. 15.5.8PACh. 15 - Prob. 15.5.9PACh. 15 - Prob. 15.5.10PACh. 15 - Prob. 15.5.11PACh. 15 - Prob. 15.5.12PACh. 15 - Prob. 15.5.13PACh. 15 - Prob. 15.1CTECh. 15 - Prob. 15.2CTECh. 15 - Prob. 15.3CTE
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- Imagine that you ale managing a small firm and thinking about entering the market of a monopolist. The monopolist is currently charging a high price, and you have calculated that you can make a nice profit charging 10 less than the monopolist. Before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?arrow_forwardImagine 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?arrow_forwardIs a monopolist a price taker? Explain briefly.arrow_forward
- From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify. Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology requited having a wile matting to every home, it seemed plausible that telephone service had diminishing average costs and might require regulation like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has occurred over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)arrow_forwardWill the firms in an oligopoly act more like a competitors or more like competitors? Briefly explain.arrow_forwarda. “The only way for a firm in a monopolistic competition to increase its sales is to lower its price.” True or false? Briefly explain. b. "Being the only seller in the market, the monopolist can choose any price and quantity it desires." True or false? Briefly explain.arrow_forward
- Listen to “Google’s Mobile Monopoly" from NPR’s Planet Money podcast. (Link here:https://www.npr.org/sections/money/2018/07/23/631652230/google-s-mobile-monopoly ) Write ashort response (2-4 college-level sentences will do) to the following questions.a. How did Google deter smart phone operating system competitors from entering the market/drive competitors out of the market?b. Discuss how Google was able to use it’s position as a monopolist in the smart phone operating system market to its advantage in the mobile applications market. (Highlight theimportance of consumer inertia in your answer.)arrow_forwardWhat’s the difference between oligopoly and monopolyarrow_forwardBriefly discuss how a monopolist can seek out the profit-maximizing quantity of outputarrow_forward
- This chapter discusses companies that areoligopolists in the markets for the goods they sell.Many of the same ideas apply to companies that areoligopolists in the markets for the inputs they buy.a. If sellers who are oligopolists try to increase theprice of goods they sell, what is the goal of buyerswho are oligopolists?b. Major league baseball team owners have anoligopoly in the market for baseball players. Whatis the owners’ goal regarding players’ salaries?Why is this goal difficult to achieve?c. Baseball players went on strike in 1994 becausethey would not accept the salary cap that theowners wanted to impose. If the owners werealready colluding over salaries, why did they feelthe need for a salary cap?arrow_forwardHow is monopoly different from the perfect competition? How is monopoly different from the perfect competition? What is a legal monopoly? Will the firms in an oligopoly act more like a monopoly or more like competitors? Briefly explainarrow_forwardDon't give AI answer T/F There is a homogenous good in monopoly market.arrow_forward
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