Homework Answers
a) "B"
Marginal revenue and the demand will be average revenue will be different because as the prices fall the quantity sold will increase in the market.
b) "B"
The firm will be producing at the point were the MR and the MC will be equal and charging the price where the demand curve co relate with the quantity produced. That is at F and A.
c) "A"
because the marginal revenue and the marginal cost will be equal.
d) Yes, the monopoly price is higher than the competitive market.
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What do economists say is problematic with the allocative efficiency of a monopoly? Consumers will suffer...
What do economists say is problematic with the allocative efficiency of a monopoly? Consumers will suffer from a monopoly because it will sell a higher quantity in the market at a lower price compared to a firm in a perfectly competitive market. Monopolies are not inefficient. They produce the optimal quantity of some output the quantity where the marginal benefit to society of one more unit just equals the marginal cost. Companies can offer a wide range of services at...
a) In a monopoly, the profit maximizing quantity occurs where ...
a) In a monopoly, the profit maximizing quantity occurs where [choose] ["marginal cost", "average cost", "total cost", "variable cost"] equals [choose] ["marginal revenue", "the minimum possible value", "zero", "average cost"] . b) The existence of [choose] ...
Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a...
Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit- maximizing monopolist. Price $40 30 20 Marginal Cost Demand 10 Margina Revenue 100 200 300 400 Quantity Refer to Figure 15-7. If fixed costs of production = $1,000, monopoly profit without price discrimination equals o $2,000. O $500 O $4,000. $1,000.
U Question 7 1 pts The figure below depicts the demand, marginal revenue, and marginal cost...
U Question 7 1 pts The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. Price $40 30 20 Marginal Cost Demand 10 Marginal Revenue O 100 200 300 400 Quantity Refer to the figure above. If there are no fixed costs of production, maximized monopoly profit for a single-price monopolist that can not price discriminate equals O $500. $1,000. O $2,000. $4,000.
Q1. Sarah has decided to spend always $200 on clothing per month. Which one of the...
Q1. Sarah has decided to spend always $200 on clothing
per month. Which one of the statements below is true?
A. Sarah’s price elasticity of demand is one because she is
maintaining her clothing expenditures as a constant fraction of the
price.
B. Sarah’s income elasticity of demand is equal to zero because her
clothing expenditure does not depend on the price.
C. Sarah’s income elasticity of demand is infinite because she is
willing to spend a huge amount of...
ID: A 9. When a monopolist is able to sell its product at different prices, it...
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are making an economic Today, firms in a perfectly competitive market run, firms will profit. In...
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1....
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the production function. Suppose the economy's production function is Y- 75x N xK, where K- 1000 and N 20, what happens if both inputs K and N are tripled? a. Y doubles. b. Y triples. c. Y quadruples d. Y is unchanged. 2. An adverse supply shock...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...
Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...
What do economists say is problematic with the allocative efficiency of a monopoly? Consumers will suffer from a monopoly because it will sell a higher quantity in the market at a lower price compared to a firm in a perfectly competitive market. Monopolies are not inefficient. They produce the optimal quantity of some output the quantity where the marginal benefit to society of one more unit just equals the marginal cost. Companies can offer a wide range of services at...
Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit- maximizing monopolist. Price $40 30 20 Marginal Cost Demand 10 Margina Revenue 100 200 300 400 Quantity Refer to Figure 15-7. If fixed costs of production = $1,000, monopoly profit without price discrimination equals o $2,000. O $500 O $4,000. $1,000.
U Question 7 1 pts The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. Price $40 30 20 Marginal Cost Demand 10 Marginal Revenue O 100 200 300 400 Quantity Refer to the figure above. If there are no fixed costs of production, maximized monopoly profit for a single-price monopolist that can not price discriminate equals O $500. $1,000. O $2,000. $4,000.
Q1. Sarah has decided to spend always $200 on clothing
per month. Which one of the statements below is true?
A. Sarah’s price elasticity of demand is one because she is
maintaining her clothing expenditures as a constant fraction of the
price.
B. Sarah’s income elasticity of demand is equal to zero because her
clothing expenditure does not depend on the price.
C. Sarah’s income elasticity of demand is infinite because she is
willing to spend a huge amount of...
ID: A 9. When a monopolist is able to sell its product at different prices, it is engaging in a quality adjusted pricing. b. price differentiation. c. price discrimination. d. distribution pricing. 10. A natural monopoly occurs when a. the product is sold in its natural state (such as water or diamonds). b. there are economies of scale over the relevant range of output. c. the firm is characterized by a rising marginal cost curve. d. production requires the use...
are making an economic Today, firms in a perfectly competitive market run, firms will profit. In the long firns in a perfectly competitive market are making the market until all firms in the market onomic e) exit, producing at the minimum point on their long-run average cost d) a) exit; covering only their total fixed costs b) enter, making zero economic profit enter, making zero normal profit an economic profit when new firms enter 46. The firms in a perfectly...
Name: e xemSon Port I: 30 Multiple Choice Questions (One point for each correct answer) 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the production function. Suppose the economy's production function is Y- 75x N xK, where K- 1000 and N 20, what happens if both inputs K and N are tripled? a. Y doubles. b. Y triples. c. Y quadruples d. Y is unchanged. 2. An adverse supply shock...
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