Homework Answers
17 - Option C
P > MC
The monopoly earns the supernatural profits , hence the condition of this would be P > MC .
All the given conditions do not match with the condition of the monopoly firm. Hence will be wrong.
18 - Option B
Average total cost
Fair return price refers to the price at which it equals the Average total cost or earns only the normal profits.
All the other options do not represent the Fair return price and will be wrong.
19 - Option C
Rent seeking.
Since the members are violating the social practise of avoiding corruption to increase their profits by bribing the government officials , hence it is called the rent seeking activity.
Price discrimination is the charging of the different price from different class of the consumers , X effficiency is the lack of the competitive pressure , hence they will not be the correct answer.
20 - Option A
Fail to achieve the minimum average total cost attainable at each level of output.
Due to the lack of the competitive pressure , the firm does not produce to an output sufficient to reduce the Average total cost. Hence the ATC remain at a higher level than required and the firm faces loss.
The other options do not accurately represent the condition of the X inefficiency .
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Help with 17-20 please.
17. Allocative efficiency for a monopoly is characterized by the condition: A....
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8. Natural monopoly analysis
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Exhibit 7-17 Marginal revenue and cost per unit curves DMC ATC Price and costs per unit (dollars) AVC 0 20 100 40 60 80 Quantity of output (units per day) 16. As shown in Exhibit 7-17, the price at which the firm earns zero economic profit in the short-runis a. $10 per unit. b. $15 per unit. c. $40 per unit. d. more than $20 per unit. e. $20 per unit. 17. In long-run equilibrium, the typical perfectly competitive firm...
8. Natural monopoly analysis The following graph shows thedemand (D) for gas services in the...
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The following graph shows the demand (D) for cable services in a particular town. The graph...
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Fill in the Table for a monopoly. Q P TR TC Profit MR MC 10 $20...
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Help with 14-16 please. 14. A Monopoly: A. Will realize an economic profit if price exceeds...
Help with 14-16 please.
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5. Natural monopoly analysisThe following graph shows the demand (D) for electricity
services in the imaginary town of Utilityburg. The graph also shows
the marginal revenue (MR) curve, the marginal cost (MC) curve, and
the average total cost (ATC) curve for the local electricity
company, a natural monopolist.On the following graph, use the black point (plus symbol) to
indicate the profit-maximizing price and quantity for this natural
monopolist.On the following graph, use the black point (plus symbol) to indicate the...
Please mark ALL correct answers A) Pure monopoly is supported by far-away (large) minimum efficiency scales B) Pure monopoly requires blocked entry, else economic profits would invite competition Smaller the minimum efficiency scale, stronger the monopoly D) Patents may help creating a monopoly CD) Pure monopoly requires no close substitutes, else substitute product will create competition Please match feature with market type Demand for market and individual producer coincide A) Monopoly B) Competitive Flat demand for individual producer C) Both...
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Help with 14-16 please.
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