(Figure 9.9) Which of the following statements is TRUE? I. Consumer surplus under perfect competition is...
(Figure 9.9) Which of the following statements is TRUE?
|
I. |
Consumer surplus under perfect competition is given by area A + B + C. |
|
II. |
Producer surplus under monopoly is given by area B + D. |
|
III. |
The deadweight loss from market power is area C. |
Homework Answers
Under perfect competition, the price is set at the point where price equals the marginal cost. Thus, in the diagram, the consumer surplus is the area above the price and below the demand curve (A + B + C).
Producer surplus is the area below the price level and above the supply curve. Under monopoly price is set at the point where marginal revenue is equal to the marginal cost. Thus, in the diagram, the producer surplus is B + D.
The dead weight loss under monopoly is area C + E. Thus, options I and II are TRUE and option III is false.
Add Answer to:
(Figure 9.9) Which of the following statements is TRUE?
I.
Consumer surplus under perfect competition is...
Part 1 (a) Which area represents consumer surplus under perfect competition? ABH? ACG? DCG? (b) Which...
Part 1
(a) Which area represents consumer surplus under perfect
competition? ABH? ACG? DCG?
(b) Which area represents producer surplus under perfect
competition? DCG? BHJD? ACG?
Part 2
(a) Which area represents consumer surplus under monopoly? BHJD?
ACG? ABH?
(b) Which area represents producer surplus under monopoly? BHJD?
CDG? ABH?
Part 3
Which area represents the deadweight loss associated with a
monopoly? HGJ? BHGC? HGFE?
Price and cost MC Market quantity
pls review carefully and help pls In perfect competition in long-run equilibrium, can consumer surplus or...
pls review carefully and help pls In perfect competition in long-run equilibrium, can consumer surplus or producer surplus be increased? Explain your answer. In perfect competition in long-run equilibrium, consumer surplus or producer surplus _______ be increased because _______. A. can; a rise in price increases producer surplus and a fall in price increases consumer surplus B. cannot; to do so requires a movement away from the long-run equilibrium C. can; producing more increases both consumer surplus and producer surplus...
Problem 1: The industry demand curve for a particular market is: Q = 2,000 - 4P....
Problem 1: The industry demand curve for a particular market is: Q = 2,000 - 4P. The firm's total costs is given by: TC = 200Q+0.750? For each of the three market cases below, you are to calculate: market output and price, consumer surplus, producer surplus, and deadweight loss. iii. Lerner Index of Monopoly Power. (a) Perfect Competition Single-Price (Pure) Monopoly First Degree Price Discrimination (c)
Suppose that a Monopolist's market demand is given by P a - Q, a>2, and that...
Suppose that a Monopolist's market demand is given by P a - Q, a>2, and that the a) Calculate the profit maximising monopoly price and quantity. b) Calculate the price and quantity that arise under perfect competition. [8 marks ] c) Calculate and compare Consumer and Producer Surplus both under monopoly [6 marks ] and perfect competition: what is the Deadweight loss due to Monopoly? Provide a graphical description of the two cases. [16 marks]
MR = 100 - 2q MC = 4 + 2q Under Perfect Competition EQ Price = 68 EQ Quantity = 32 CS = 512 PS = 1024 TW = 1536 Under M...
MR = 100 - 2q
MC = 4 + 2q
Under Perfect Competition
EQ Price = 68
EQ Quantity = 32
CS = 512
PS = 1024
TW = 1536
Under Monopoly
EQ Quantity = 24
EQ Price = 76
Now ...
Calculate the Consumer Surplus, Producer Surplus and Welfare
levels under monopoly.
How much deadweight loss does the monopolist create?
What could the government do to regulate the monopolist?
Consider a situation where a monopolist faces the following inverse...
Consider a market with the following demand curve: ? = 200 − 2? MC=20 Assume ?...
Consider a market with the following demand curve: ? = 200 − 2? MC=20 Assume ? > ???. a. Find the perfectly competitive price and quantity. ??? = _____________, ??? =_____________ b. Find the monopoly price and quantity. ?? = _____________, ?? =_____________ c. Find the loss of consumer surplus in monopoly vs. perfect competition. ?????? =_____________ d. Find the producer surplus in monopoly. ?????????? =_____________ e. Find the deadweight loss in monopoly. ??????????? =_____________
5. Monopoly outcome versus competition outcome Consider thedaily market for hot dogs in a small...
5. Monopoly outcome versus competition outcome Consider the
daily market for hot dogs in a small city. Suppose that this market
is in long-run competitive equilibrium with many hot dog stands in
the city, each one selling the same kind of hot dogs. Therefore,
each vendor is a price taker and possesses no market power. The
following graph shows the demand (D) and supply curves (S = MC) in
the market for hot dogs. Place the black point (plus symbol) on...
5. Monopoly outcome versus competition outcome sider the daily market for hot dogs in a small...
5. Monopoly outcome versus competition outcome sider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in he city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S MC) in the market for hot dogs Place the black point (plus symbol) on...
4-5 and 6E and F 4) Refer to Figure 15-11. Following the entry of Verizon, the subscripsion price talls rom PMt to P...
4-5
and 6E and F
4) Refer to Figure 15-11. Following the entry of Verizon, the subscripsion price talls rom PMt to Pc What is the increase in consumer surplas as a result of this changs A) the area B+C Q) the area D+F B) the area B+C.D D) the area A B 5) Refer to Figure 15-11. What is the size of the deadweight loss prior to Verizon entering the market5) and what happens to this deadweight loss after...
Under a monopoly market structure a. Consumer surplus is maximized. b. Producer surplus is maximized. c....
Under a monopoly market structure a. Consumer surplus is maximized. b. Producer surplus is maximized. c. Producer surplus is minimized. d. Consumer surplus is negative e. None of the above
Part 1
(a) Which area represents consumer surplus under perfect
competition? ABH? ACG? DCG?
(b) Which area represents producer surplus under perfect
competition? DCG? BHJD? ACG?
Part 2
(a) Which area represents consumer surplus under monopoly? BHJD?
ACG? ABH?
(b) Which area represents producer surplus under monopoly? BHJD?
CDG? ABH?
Part 3
Which area represents the deadweight loss associated with a
monopoly? HGJ? BHGC? HGFE?
Price and cost MC Market quantity
Problem 1: The industry demand curve for a particular market is: Q = 2,000 - 4P. The firm's total costs is given by: TC = 200Q+0.750? For each of the three market cases below, you are to calculate: market output and price, consumer surplus, producer surplus, and deadweight loss. iii. Lerner Index of Monopoly Power. (a) Perfect Competition Single-Price (Pure) Monopoly First Degree Price Discrimination (c)
Suppose that a Monopolist's market demand is given by P a - Q, a>2, and that the a) Calculate the profit maximising monopoly price and quantity. b) Calculate the price and quantity that arise under perfect competition. [8 marks ] c) Calculate and compare Consumer and Producer Surplus both under monopoly [6 marks ] and perfect competition: what is the Deadweight loss due to Monopoly? Provide a graphical description of the two cases. [16 marks]
MR = 100 - 2q
MC = 4 + 2q
Under Perfect Competition
EQ Price = 68
EQ Quantity = 32
CS = 512
PS = 1024
TW = 1536
Under Monopoly
EQ Quantity = 24
EQ Price = 76
Now ...
Calculate the Consumer Surplus, Producer Surplus and Welfare
levels under monopoly.
How much deadweight loss does the monopolist create?
What could the government do to regulate the monopolist?
Consider a situation where a monopolist faces the following inverse...
5. Monopoly outcome versus competition outcome sider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in he city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S MC) in the market for hot dogs Place the black point (plus symbol) on...
4-5
and 6E and F
4) Refer to Figure 15-11. Following the entry of Verizon, the subscripsion price talls rom PMt to Pc What is the increase in consumer surplas as a result of this changs A) the area B+C Q) the area D+F B) the area B+C.D D) the area A B 5) Refer to Figure 15-11. What is the size of the deadweight loss prior to Verizon entering the market5) and what happens to this deadweight loss after...
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