Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 9, Problem 12SQ
To determine
The profit maximizing output of the monopolist.
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Students have asked these similar questions
[19] For a monopolist, except at an output of zero, price is less than marginal revenue.
A. True
B. False
[21] At a current price of $100, a firm is selling a quantity for which marginal cost is $30. As such the Lerner Index (price-cost margin) is
A. 0.30
B. 0
C. 0.70
D. 0.54
Monopoly
Market demand is P=64-(Q/7). A multiplant monopolist operatesthree plants, with marginal cost functions: MC1(Q1)=4Q1 , MC2(Q2)= 4, MC3=6+Q3.
How many products should be produced in eachplant?
Suppose a monopolist is currently producing where its variable costs are $1 million. Its fixed costs are $1.5 million. Its revenues are $1.2 million. Should the firm shut down in the short run? Should it leave the industry in the long run?
a
no; yes
b
no; no
c
yes; yes
d
yes; no
Chapter 9 Solutions
Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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Similar questions
- Q11 Price Number of Ounces of Marijuana Sold $20 3 18 5 16 7 14 10 12 15 10 30 The table shows the demand schedule facing Cresco Labs, which we will assume is a monopolist selling marijuana. If Cresco Labs had no production costs, what price would it charge to maximize profits? Multiple Choice $12 $20 $16 $10 $15.arrow_forwardA monopolist discriminates the price of its product among two groups as follows: Q1 = 100 - p1 (demand of customers in group 1) Q2 = 120 - 0.5p2 (demand of customers in group 2) TC = 2000 + ( Q1 + Q2)2 (total cost of production) a) Find the optimal sales to the first, Q1 * , and to the second, Q2 * , group. b) Find prices to be charged to the first, p1 * , and to the second, p2 * , group. c) Find the profit of this firm. d) Show that the group with more elastic demand gets lower price.arrow_forwardOnce a monopolist has determined its profit-maximizing (equilibrium) quantity of output, QM, which condition does it use to set the price? Question 9Answer a. None of the other options are correct b. Price = Demand at QM c. Price = Average Cost at QM d. Price = Marginal Cost at QMarrow_forward
- sketch the pareto-inefficiency and dead weight loss created by monopolist.arrow_forwardExhibit 9-4: A Monopoly Quantity Total Fixed Total Variable Price Demanded Cost Cost $100 0 $30 $0 90 1 $30 20 80 2 $30 48 70 3 $30 78 60 4 $30 110 50 5 $30 150 Refer to Exhibit 9-4. At an output level of 5 units, the monopolist earns a total profit of about ________. Group of answer choices $100.00 $70.00 $102.00 $82.00arrow_forwardDemand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q For this monopolist, the profit-maximizing price is ________ and the profit-maximizing quantity is _________. A 40, 80 B 90, 30 C 20, 80 D None of these answersarrow_forward
- A firm typically achieves its position as a monopolist as a result of _. (a) the absence of long-run profits in an industry (b) a small market and a constant average cost (c) barriers to entry (d) a downward sloping demand for the product. Provide reasons for incorrect as well.arrow_forwardTrue or false: (H). The monopolistʹs profit-maximizing price will be above marginal cost, because at the profit maximizing level of output the monopolistʹs marginal revenue curve lies below its demand curve. (I). Because the monopolist is the sole producer of a good, it can never incur a loss. (J). In perfect competition, price is equal to marginal revenue while in monopoly price is greater than marginal revenue.arrow_forwardA monopolist is producing at an output level at which ATC = $50, P = $60, MC = $35, and MR = $45. We can conclude that economic profit cannot be increased. the firm is earning $10 in economic profits. economic profit could be increased by producing more. economic profit could be increased by producing less.arrow_forward
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