EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 16, Problem 3MCQ
To determine
Among the given options, identify the correct one on the basis of below statement:
A
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A natural monopoly refers to a monopoly that is defended from direct competition by
a.
Control over a vital input
b.
A government franchise
c.
A patent or copyright
d.
Economies of scale over a broad range of output
Draw the graph. If the monopoly is a doing perfect price discrimination, then:
1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.
A monopoly is considered a _____ and a competitive firm is considered a _________.
a. price taker; price taker
b. price maker; price maker
c. price taker; price maker
d. price maker; price taker
Chapter 16 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 16 - Prob. 1SPPACh. 16 - Prob. 2SPPACh. 16 - Prob. 3SPPACh. 16 - Prob. 4SPPACh. 16 - Prob. 5SPPACh. 16 - Prob. 6SPPACh. 16 - Prob. 7SPPACh. 16 - Prob. 8SPPACh. 16 - Prob. 9SPPACh. 16 - Prob. 10SPPA
Ch. 16 - Prob. 11SPPACh. 16 - Prob. 1IAPACh. 16 - Prob. 2IAPACh. 16 - Prob. 3IAPACh. 16 - Prob. 4IAPACh. 16 - Prob. 5IAPACh. 16 - Prob. 6IAPACh. 16 - Prob. 7IAPACh. 16 - Prob. 8IAPACh. 16 - Prob. 9IAPACh. 16 - Prob. 10IAPACh. 16 - Prob. 1MCQCh. 16 - Prob. 2MCQCh. 16 - Prob. 3MCQCh. 16 - Prob. 4MCQCh. 16 - Prob. 5MCQCh. 16 - Prob. 6MCQCh. 16 - Prob. 7MCQ
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- What is the dead weight loss? a.The loss in welfare due to the monopoly producing a LARGER amount than a competitive market would b. None of the other answers is correct c.A new weight loss system d.The loss in welfare due to the monopoly producing a SMALLER amount than a competitive market wouldarrow_forwardGive typing answer with explanation and conclusion The inefficiency (dead-weight loss) of a monopoly (as compared to perfect competition) indicates the amount by which Group of answer choices price exceeds marginal revenue at a particular output level. consumer welfare is increased by the monopolist. price exceeds marginal cost at a particular output level. marginal benefits exceed marginal cost for those units not produced by the monopolist but that would otherwise be produced in a competitive market. marginal costs exceed marginal benefits for those units not produced by the monopolist but that would otherwise be produced in a competitive market.arrow_forwardOne difference between a competitive firm and a monopoly is that __________________. a. monopoly makes economic profits, but a competitive firm never makes economic profits b. a monopoly faces a downward sloping marginal revenue curve, whereas a competitive firm faces a horizontal marginal revenue curve c. the cost curves of a monopoly are always below those of a competitive firm d. a monopoly always has economies of scale, but a competitive firm always has diseconomies of scalearrow_forward
- Please submit the answer and then watch the video feedback.Tony's Tree Service is the only firm in a town that removes large trees. Tony invested in costly bucket trucks and wood chippers when he began his business. Which of the following best describes the barrier to entry that allows Tony to keep his monopoly? a.monopoly resources b.government-created monopoly c.natural monopolyarrow_forwardNeed typed solutionarrow_forwardWhen does a company officially become a monopoly? a. when it controls more than 25 percent of the output of a certain product b. when the government decides the company is a threat to the national economy c. when a company controls the output for a marketable product without meaningful competition d. when a company controls more than 50 percent of the output of a productarrow_forward
- When a firm or business holds a patent and has no competition in manufacturing a good or providing a service, it is known as _____. a. a technological monopoly b. a natural monopoly c. monopolistic competition d. perfect competitionarrow_forwardA monopoly market is characterized by the profit maximizer, price maker, high barriers to entry, single seller, and price discrimination. The information on the table below is a typical monopoly firm. Use it to answer the questions that follow Output Price Total Cost 0 $100 $200 1 100 290 2 100 350 3 100 390 4 100 470 5 100 560 6 100 700 7 100 900 i. What is the profit maximizing or loss minimizing quantity of output of this firm to produce? Why? ii. What is the profit or loss at the profit maximizing or loss minimizing output level? iii. Should the firm shut down or remain in operation? Why? iv. Assuming this is a representative firm in the industry or market, given the profits or losses incurred, what can be expected to happen over time in the market?arrow_forwardQuestion 3: Monopoly graph. Do parts a, b., c Draw the short-run ATC, AVC, MC, MR and Demand graphs for a monopoly market. In each part, show Total Cost (TC), Total Revenue (TR), shade the profit or loss. Clearly label Q for the equilibrium quantity point and P for market price point. a. Draw a profit situation b. Draw a loss (not shutdown) situation c. Draw a monopoly and perfectly competitive industry on the same graph space. Only show equilibrium quantity and price of monopoly (Qm and Pm) and quantity and price for a perfect competition situation denoted as (Qpc and Ppc). You do not need to identify TR, TC or shade the profit in this graph.arrow_forward
- The figure below shows demand, marginal revenue, and short-run cost curves for a monopoly: a. How much should the firm produce? What price should it charge? b. What is the firm’s profit (loss)? Should this firm produce or shut down? Explain. c. If the firm shuts down in the short run, how much will it lose?arrow_forwardMicrosoft Windows 8 to Go on Sale in October. Microsoft announced that its Windows 8 operating system will be released in October 2012, three years after Windows 7 went public. Windows 8 will be available in 109 languages across 231 markets worldwide a. Is Microsoft a natural monopoly or a legal monopoly? b. Does Microsoft price discriminate or do the different prices of Windows reflect cost differences? c. Sketch a demand curve for Windows, Microsoft’s marginal cost curve, and the distribution of the total surplus between consumers and Microsoft.arrow_forwardecon. answer A, B,Carrow_forward
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