ECONOMICS - UPDATED
20th Edition
ISBN: 9781259795862
Author: McConnell
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Question
Chapter 21, Problem 11DQ
To determine
Industrial and social regulation.
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Students have asked these similar questions
A local magic shop has a monopoly on the production of magic wands. Each customer wants only one magic
wand, and the table below shows each customer's willingness to pay. The marginal cost of producing a wand is
$21 no matter how many are produced.
Quantity demanded
Price per wand ($)
LO
01 2 3 4 5
6 78
30 27 24 21 18 15 12 96
If the shop can charge only a single price, it will charge $
wands.
If the firm practices perfect price discrimination, it will sell a total of
earn a profit of $|
and sell
wands and
Suppose that demand is Qlp)-2000-4p. Consider the marginal revenue curve of a monopolist who operates in this market.
Assume that it is plotted on a two-axis graph in which the horizontal axis measures quantities and the vertical axis measures
marginal revenue. What is the horizontal intercept of the marginal revenue curve?
O 500
O 750
O 1000
O 2000
O 250
True or false: Economists believe that social regulation is an exception to the MB = MC rule because social regulation should in every case extend as far as possible in order to ensure safe products, less pollution, and improved working conditions. L
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