Question

Give an example of a closed monopoly. Given your example, what benefits (if any) are derived from its existence?

What is meant by the term consumer surplus, and how is it measured?

A firm is producing 5,000 units of output using capital and labor in such a way that the marginal product of capital is 100 and the marginal product of labor is 20. Each unit of capital costs $50, and each unit of labor costs $25. Confirm that this firm is not minimizing its costs. If the firm does not wish to change its output level, what actions would you recommend to reduce costs?

What is meant by the term tax incidence, and how is tax incidence affected by price elasticity of demand?

How does regulation of an industry differ from health and safety regulation?

Answer 1

Closed monopoly are those monopoly which are closed by government to new competition in other words we can say that government law mandate that there are to be no new compititor in particular niche,

Example are monopoly granted to local water, gas, electric and other utilities etc

The benefit of close monopoly Are

The pros to closed monopolies are they are usually heavily regulated by government entitieswhich tend to guarantee the company a profit for taking risk. Customers are guaranteed fairprices due to regulation as any increase in cost to the customer must be approved by aregulations committee. Utilities are good examples of closed monopolies.

2) :- consumer surplus is difference between willing to pay and the market Price.

It is measure as amount of buyer is willing to pay minus amount of products buyer actually pay.