CONNECT F/MICROECONOMICS
21st Edition
ISBN: 2810022151240
Author: McConnell
Publisher: MCG
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Chapter 21, Problem 1RQ
To determine
Whether the statement is true or false about the monopoly .
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6. The total cost curve for firms in a natural monopoly is estimated to be:
TC = 2Q3 – 100Q² + 10000Q
The government has a desired industry output of 100. What is the minimum efficient scale in this industry?
O 5%
O 10%
O 12.5%
O 25%
O 50%
[Q: 11-4660750j Consider a monopoly that faces an inverse demand curve with a constant elasticity, p(Q) = Q°, and that has a constant marginal cost, MC(Q) = m.
If the own-price elasticity is e = - 6.9, marginal costs are m=7, and the government imposes a specific tax on the monopolist, what will be the tax incidence on consumers?
O A. 65.42%
O B. 38.1%
OC. the same incidence as when the tax is imposed on a perfectly competitive firm.
O D. 50%
O E. 116.95%
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- Price (dollars per unit) 30 24 21 18 16 12 O 4 $12 to $18. $18 to $24. $12 to $18. a $12 to $24. 8 MR b 12 LRAC (inflated) LRAC MC In the above figure, if the natural monopoly is regulated using an average cost pricing rule, but the firm can pad its costs and make the regulator believe its costs are LRAC (inflated), then the price the firm charges will increase from D₁ 20 16 Quantity (millions)arrow_forwardExplain in details , otherwise I will give you downvotearrow_forwardPrice and cost (dollars per unit) 50.00 40.00 S=MC 30.00 20.00- 10.00. MR D. 100 200 300 400 500 Quantity (units per hour) In the above figure, a monopoly should charge $ for its output when maximizing profit. O $10 $20 $30 $40 O $50arrow_forward
- Firm A and B both produce good Q. Demand is Q-45-0.5P, where P is price. Both firms have total cost TC = 6 + 16Q₁, where i A,B. If the firms collude to produce the monopoly output, the resulting consumer surplus is? O342.25 O 354.75 O 362.22 370.74arrow_forwardAn industry with only one producer has a demand curve of P = 90-Q, with price in dollars and quantity in thousands. The monopolist's marginal cost curve is MC = 30 + 2Q. What is the deadweight loss of monopoly in this industry? O $100,000 O $37,500 O $72,667 $50,000arrow_forwardThe figure on the right shows the demand schedule for a product produced by a single-price monopolist. Price ($) 9 8 0000 7 6 5 4 3 C. 5th unit Quantity demanded What is the lowest level of output at which marginal revenue becomes negative? OA. 6th unit OB. 9th unit D. 7th unit OE. 8th unit 5 6 7 8 9 10 11 Price ($) 141 222 =26=LO 13- 12- 11- 10- 9- 8- 4- 2- 1- 45 6 7 8 9 10 11 12 13 14 15 16 Quantity Earrow_forward
- Please please explain all subparts. I will really really upvote. Thanksarrow_forwardIgnore AFC and AVC 2. Suppose a pure monopolist faces the following demand schedule and the same cost data as the competitive producer discussed in problem 4 at the end of Chapter 10. Calculate the missing TR and MR amounts, and determine the profit-maximizing price and profit-maximizing output for this monopolist. What is the monopolist's profit? Verify your answer graphically and by comparing total revenue and total cost. LO11.4 Average Total Average Variable Average Marginal Product Fixed Cost Cost Total Cost Cost 0 $45 1 $60.00 $45.00 $105.00 40 2 30.00 42.50 72.50 35 3 20.00 40.00 60.00 30 4 15.00 37.50 52.50 35 5 12.00 37.00 49.00 40 6 10.00 37.50 47.50 45 7 8.57 38.57 47.14 55 8 7.50 40.63 48.13 65 9 6.67 43.33 50.00 75 10 6.00 46.50 52.50 Price Quantity Demanded Total Revenue Marginal Revenue $115 83 63 55 48 42 29 2 % 522332 100 0 1 2 3 4 5 6 7 37 8 9 10 $arrow_forwardA 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 andarrow_forward
- 14arrow_forwardA monopolist has variable costs of VC = q² and no fixed costs and faces a demand curve of P = 24 - q, where P is price and q the quantity sold. What is the monopolist's profit? 072 O 64 None of the other answers is correct. O 48 O 36arrow_forwardSuppose that two identical firms are Cournot competitors. Industry demand is given by: p= 200 – q. - 42 where q and q2 are the outputs of Firm 1 and Firm 2 respectively. Both Firm 1 and Firm 2 face constant marginal and average total costs of $20. Find the output quantity for each frm. 10 O 20 40 O 60 D Question 16 For the information in the above question, Find the output price. 70 50 90 100arrow_forward
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