Homework Answers
1)
Answer : (d)
Firm is not charging the price below the it's average cost of production. Therefore this is not a predatory pricing.
2)
Answer: (b)
Monopoly firm seeks to influence the behaviour and it is also successful in influencing the behaviour of government as well.
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Firm X produces and sells office furniture. For a particular desk it sells the price it...
Question 22 1 pts Firm X produces and sells office furniture. For a particular desk it...
Question 22 1 pts Firm X produces and sells office furniture. For a particular desk it sells the price it charges is $200, its average total cost is $170, and its marginal cost is $160. Firmy decides to enter the market and sells a desk that is virtually identical. It decides to charge a price of $150, while its average total cost is $140, and its marginal cost is $130. Is Firm Yengaging in predatory pricing? More information is needed...
1. Marginal cost pricing means that a firm charges Group of answer choices A price that...
1. Marginal cost pricing means that a firm charges Group of answer choices A price that is marginally lower than the average total cost of production. Any price as long as average total cost is greater than marginal cost. A price that is marginally higher than the average total cost of production A price that is equal to the marginal cost of production. 2. If the government wants a natural monopolist to achieve allocative efficiency, the government should Group of...
1,6. A firm finds that by producing and selling the last unit of its commodity, the...
1,6. A firm finds that by producing and selling the last unit of its commodity, the marginal revenue it earns is R15 and the marginal cost it incurs is R14. In order to maximise profits, the firm should A reduce its output irrespective of the type of firm it is. B. increase its output irrespective of the type of firm it is. C. reduce its output if it is a perfectly competitive firm, but not necessarily if it is a...
Consider a monopoly (firm A) which produces and sells gadgets. The firm has been around for...
Consider a monopoly (firm A) which produces and sells gadgets. The firm has been around for along time, implying it has no fixed cost for the production. The inverse market demand function is: P= 14−Q, wherePis the price of gadgets, Q is total supply. Firm A’s marginal (and average-)cost for producing gadgets is 2. 1. Suppose now that a firm B considers entering the market. If it enters, the two firms decideabout production volumes simultaneously. Firm B has the same...
The graph below depicts the cost curves of ABC Water and Heat. ABC has a natural...
The graph below depicts the cost curves of ABC Water and Heat. ABC has a natural monopoly in natural gas delivery in its immediate area. Monopoly pricing Marginal cost pricing Average cost pricing Price ($/MMBTU) Average total cost Marginal cost Marginal revenue Demand Quantity (MMBTU) a. Place the point labelled “Monopoly pricing" at the appropriate coordinates to indicate the monopoly price and quantity b. Suppose the government tries to achieve allocative efficiency (P = MC) by imposing a marginal cost...
microeconomics
Given what you know about the firm pricing behavior and profits in a competitiive market, explain why firms try to differentiate their products and increase the fame of their brands. A firm’s supply function is given by S(p) = 2p. What is its marginal cost at any output level y? What are its profits if the price is given at 10. What are its profits if there are fixed costs of 50?Predatory pricing is the practice of lowering prices below the...
36) When a monopolist sells the same product at different prices and the prices are not related to cost differences, we have B) price differentiation. D) monopoly pricing A) price discrimination...
36) When a monopolist sells the same product at different prices and the prices are not related to cost differences, we have B) price differentiation. D) monopoly pricing A) price discrimination C) marginal cost pricing. 37) 37) Monopolies misallocate resources because A) price does not equal marginal cost B) profits are usually positive. C) marginal cost does not equal average total cost. D) price does not equal average total cost. 38) 38) Which of the following assumptions is true about...
Answer all questions 39. Microsoft sets prices for its new line of computers, and Dell and HP follow. This practice is known as A) B) C) D) antitrust pricing price extortion price leadership kinke...
Answer all questions
39. Microsoft sets prices for its new line of computers, and Dell and HP follow. This practice is known as A) B) C) D) antitrust pricing price extortion price leadership kinked demand behavior 40. To be binding, a price ceiling must be set at a price: A) lower than the equilibrium price. B) higher than the equilibrium price. C) the same as the equilibrium price. D) any price ceiling is binding. 41. The profit-maximizing rule MR- MC...
Quality Furniture,Inc., produces a wood desk that sells for $500 and a wood table that sells for ...
Quality Furniture,Inc., produces a wood desk that sells for $500
and a wood table that sells for $900. Last year, total overhead
costs of $6,000,000 were allocated based on direct labor costs.
Direct labor costs totaled $2,000,000 last year, and Quality
Furniture produced 15,000 desks and 5,000 tables. Total direct
labor and direct materials costs by product for the last year were
as follows:
Desk
Table
Total
Direct materials
1,575,000
950,000
Direct labor
1,200,000
800,000
2,000,000
Sales price
500
900...
1.) What is the main difference between a competitive firm and a monopoly? a. A competitive...
1.) What is the main difference between a competitive firm and a monopoly? a. A competitive firm owns a key resource, but a monopoly firm does not. b. A competitive firm is a price taker, and a monopoly is a price maker. c. A competitive firm produces output at a lower cost than a monopoly firm. d. A competitive firm is subject to government regulations, but a monopoly firm is not. 2.) What is the main social problem caused by...
Question 22 1 pts Firm X produces and sells office furniture. For a particular desk it sells the price it charges is $200, its average total cost is $170, and its marginal cost is $160. Firmy decides to enter the market and sells a desk that is virtually identical. It decides to charge a price of $150, while its average total cost is $140, and its marginal cost is $130. Is Firm Yengaging in predatory pricing? More information is needed...
1,6. A firm finds that by producing and selling the last unit of its commodity, the marginal revenue it earns is R15 and the marginal cost it incurs is R14. In order to maximise profits, the firm should A reduce its output irrespective of the type of firm it is. B. increase its output irrespective of the type of firm it is. C. reduce its output if it is a perfectly competitive firm, but not necessarily if it is a...
The graph below depicts the cost curves of ABC Water and Heat. ABC has a natural monopoly in natural gas delivery in its immediate area. Monopoly pricing Marginal cost pricing Average cost pricing Price ($/MMBTU) Average total cost Marginal cost Marginal revenue Demand Quantity (MMBTU) a. Place the point labelled “Monopoly pricing" at the appropriate coordinates to indicate the monopoly price and quantity b. Suppose the government tries to achieve allocative efficiency (P = MC) by imposing a marginal cost...
36) When a monopolist sells the same product at different prices and the prices are not related to cost differences, we have B) price differentiation. D) monopoly pricing A) price discrimination C) marginal cost pricing. 37) 37) Monopolies misallocate resources because A) price does not equal marginal cost B) profits are usually positive. C) marginal cost does not equal average total cost. D) price does not equal average total cost. 38) 38) Which of the following assumptions is true about...
Answer all questions
39. Microsoft sets prices for its new line of computers, and Dell and HP follow. This practice is known as A) B) C) D) antitrust pricing price extortion price leadership kinked demand behavior 40. To be binding, a price ceiling must be set at a price: A) lower than the equilibrium price. B) higher than the equilibrium price. C) the same as the equilibrium price. D) any price ceiling is binding. 41. The profit-maximizing rule MR- MC...
Quality Furniture,Inc., produces a wood desk that sells for $500
and a wood table that sells for $900. Last year, total overhead
costs of $6,000,000 were allocated based on direct labor costs.
Direct labor costs totaled $2,000,000 last year, and Quality
Furniture produced 15,000 desks and 5,000 tables. Total direct
labor and direct materials costs by product for the last year were
as follows:
Desk
Table
Total
Direct materials
1,575,000
950,000
Direct labor
1,200,000
800,000
2,000,000
Sales price
500
900...
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