EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 16, Problem 5MCQ
To determine
Among the given options, identify the correct one on the basis of below statement:
A single-price
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Draw the graph. If the monopoly is a single price monopoly then:
the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)
the monopoly charges a price of P = ________
the consumer surplus is CS = ______ (identify the area on the graph and calculate it).
the producer surplus is PS = _________(identify the area on the graph and calculate it).
the deadweight loss of the monopoly (as compared to perfect competition) is DWL = ______ (identify the area on the graph and calculate it).
A monopoly creates a deadweight loss because the monopoly:
O Produces less than the efficient quantity.
O Produces more than the efficient quantity.
Earns a normal profit.
O Sets a price that is too low.
Consider a monopoly firm producing laptops. Below are the equations describing this firm's economic conditions.
Demand: Q = 10 – P
Marginal Revenue: MR= 10 – 2Q
Total Cost: TC = 4 + Q + 0.5Q²
||
Marginal Cost: MC=1+Q
Choose all correct statements.
The produced quantity is 3.
В.
The price charged is 6.
n C.
The profit this monopoly firm can make is 9.5.
D.
None of above is correct.
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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- An unregulated natural monopoly bottles Liquid Sunlight, a unique product with no substitutes. The monopoly's total fixed cost is $190,000 and its marginal cost is 30 cents a bottle. How many bottles of Liquid Sunlight does the monopoly sell and what is the price of a bottle of Liquid Sunlight? Is the monopoly's use of resources efficient? The graph shows the demand curve for Liquid Sunlight. Draw the marginal revenue curve. Label it MR. Draw the marginal cost curve. Label it MC. Draw a point at the monopoly's profit-maximizing quantity and price. 60 50- 40- 30- 20- 10- 0- Price and cost (cents per bottle) 0 D 0.5 1.5 2 Quantity (millions of bottles per year) >>> Draw only the objects specified in the question. 2.5arrow_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_forwardCurrently the market for domestic air travel in OzLand is a monopoly with Qanwings as the supplier. A new supplier, Cheap Flights, enters the market. Suppliers in the market compete by simultaneously choosing the quantity of flights they will supply. Which of the following is most likely to occur after the entry of the new supplier to the market for domestic air travel? a.The total quantity of flights will increase. b.The total quantity of flights will not change. c.The total quantity of flights will decrease. d. It is not possible to say what will happen to the quantity of flights.arrow_forward
- Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. C Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 G A WNIO 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750arrow_forwardHot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $40 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. CH Price (dollars per ride) 150 140 130 120 110 100 Quantity (rides per month) 0 1 2345 Total cost (dollars per month) 50 175 310 455 610 775arrow_forwardConsider the following market demand p= 20 - 0.02 Q where p is the price in $ or kilo and Q is the quantity demanded in kilo/ per week.The marginal cost of schedule is given by MC = 2 + 0.03 Q. a. if this were a perfectly competitive market what would be the equilibrium price and quantity show your work? b. if this were a monopolized market what would be the equilibrium price and quantity show your work? c. what is the dead weight loss in the monopolized market give the number and show your work?arrow_forward
- A monopoly charges higher; lower O higher; higher lower; higher lower; lower prices and produces a quantity than a competitive market.arrow_forwardPete has developed a new virtual reality headset that is so far advanced he effectively has a monopoly. His marginal cost is a constant $200, and his inverse demand is P = 800 – 4Q. What is the deadweight loss in this monopoly? a.) $0 b.) $45,000 c.) $11,250 d.) $22,500 Give typing answer with explanation and conclusionarrow_forwardBack Question 8 Not yet answered Marked out of 10.00 Flag question A monopoly faces a demand curve: D(p)=200-p. MC=20, FC=100. Calculate the profit-maximaizing quantity and answer the following questions. TR= CS= Inverse demand function: P= TC= PS= P= Optimal quantity: Q= SW(Social welfare)= profit= Marginal revenue function: MR= - 14 Monopoly CH11 PPT Choose... Choose... Choose... Choose... Choose... Choose... Choose... Choose... Choose... Choose... Jump to... DELL 46 Time left 0:03:47 Finish attempt... 1 8 2 3 Finish attempt ... 4 5 4x ENG 6 7 10:46 AM 2/2/2024arrow_forward
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