Regulating a monopoly at the average cost price a. will induce excess profit if there are...
Regulating a monopoly at the average cost price
a. will induce excess profit if there are economies of scale
b. will induce negative profit if there are economies of scale
c. will shift the monopoly's costs up
d. none of the above
Homework Answers
Answer : The answer is option d.
Because if the price is equal to the average cost then the firm earn normal profit which is also known as zero economic profit. No matter there exists economies of scale or not. As options a, b and c are not correct hence option d is the answer.
Add Answer to:
Regulating a monopoly at the average cost price
a. will induce excess profit if there are...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost...
Suppose a firm is a monopoly. Its marginal cost curve is flat,
and its average cost curve is downward sloping (because it has a
fixed cost).
1.) Using the point drawing
tool,
indicate the monopoly's profit-maximizing price and quantity in
the figure if it cannot price discriminate. Label this point
'e 1e1.'
2.) Using the rectangle drawing
tool,
indicate the monopoly's losses at the no price discrimination
profit-maximizing price and quantity. Label this rectangle
'Losses 1Losses1.'
3.) Using the point...
Open the interactive monopoly interactive and use it to answer the four questions. Assume that the...
Open the interactive monopoly interactive and use it to answer the four questions. Assume that the monopoly rationally acts to maximize profits, and please specify all answers to one decimal place. Hit the reset button of the interactive. What is this monopoly's total cost? total cost $ What is this monopoly's profit? profit: $ If this monopoly has no fixed cost, what is its total cost? To find out, set the fixed cost slider to $0. total cost: 5 What...
A monopoly has a constant marginal cost of production of $4 per unit and no fixed...
A monopoly has a constant marginal cost of production of $4 per unit and no fixed costs. In the figure to the right, let D be demand and MR be marginal revenue. 1.) Using the line drawing tool graph the monopoly's marginal cost curve. Label this curve 'MC! 2.) Using the line drawing tool, graph the monopoly's average variable cost curve. Label this curve 'AVC.' 3.) Using the line drawing tool, graph the monopoly's average cost curve. Label this curve...
A monopoly has a constant marginal cost of production of $2 per unit and no fixed...
A monopoly has a constant marginal cost of production of $2 per unit and no fixed costs. In the figure to the right, let D be demand and MR be marginal revenue. TTT 1.) Using the line drawing tool, graph the monopoly's marginal cost curve. Label this curve 'MC.' 2.) Using the line drawing tool, graph the monopoly's average variable cost curve. Label this curve 'AVC.' p, $ per unit 3.) Using the line drawing tool, graph the monopoly's average...
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] ...
If a monopoly experiences an increase in fixed cost, a.The profit-maximizing price will change b.The marginal...
If a monopoly experiences an increase in fixed cost, a.The profit-maximizing price will change b.The marginal revenue curve will also shift c.The marginal cost curve will remain unchanged d.None of the above.
When marginal cost of production rises above the average total cost of production, we know that:...
When marginal cost of production rises above the average total cost of production, we know that: A. the firm has economies of scale B. average total cost is decreasing C. marginal cost is negative D. average total cost is increasing Average total cost curves are usually depicted as downward sloping at low levels of output because: A. Average fixed costs are declining B. Opportunity costs decline as output (Q) increases C. Average fixed...
9. Regulating a natural monopoly Consider the local cable company, a natural monopoly
9. Regulating a natural monopoly Consider the local cable company, a natural monopoly. The following graph shows the monthly demand curve for cable services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves. Suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. Complete the first row of the following table. Suppose that the government forces the monopolist to set the price equal to marginal cost. Complete...
a) Differentiate between monopolistic and monopoly market structures. b) The short-run average total cost curve and...
a) Differentiate between monopolistic and monopoly market structures. b) The short-run average total cost curve and the long-run average total cost curve are similarly shaped. What are the causes for the short run and long-run average total cost curve to slope down and up? c) What is natural monopoly and how is it related to economies of scale? d) Mr. Salim has been working at a car manufacturing plant forthe last 4 years. He recently lost his job due to...
1l. If a monopolistically competitive firm is incurring losses, then at the profit-max a price is above the average total cost curve. b. price is below the average total cost curve c. price is equal to marginal revenue. d. price is less than marginal revenue. e. average total cost equals marginal cost. Both competitive and monopolistically competitive firms a. can maximize profit by raising price. b. cannot control or set their own price c. can maximize profit by producing to...
Suppose a firm is a monopoly. Its marginal cost curve is flat,
and its average cost curve is downward sloping (because it has a
fixed cost).
1.) Using the point drawing
tool,
indicate the monopoly's profit-maximizing price and quantity in
the figure if it cannot price discriminate. Label this point
'e 1e1.'
2.) Using the rectangle drawing
tool,
indicate the monopoly's losses at the no price discrimination
profit-maximizing price and quantity. Label this rectangle
'Losses 1Losses1.'
3.) Using the point...
Open the interactive monopoly interactive and use it to answer the four questions. Assume that the monopoly rationally acts to maximize profits, and please specify all answers to one decimal place. Hit the reset button of the interactive. What is this monopoly's total cost? total cost $ What is this monopoly's profit? profit: $ If this monopoly has no fixed cost, what is its total cost? To find out, set the fixed cost slider to $0. total cost: 5 What...
A monopoly has a constant marginal cost of production of $4 per unit and no fixed costs. In the figure to the right, let D be demand and MR be marginal revenue. 1.) Using the line drawing tool graph the monopoly's marginal cost curve. Label this curve 'MC! 2.) Using the line drawing tool, graph the monopoly's average variable cost curve. Label this curve 'AVC.' 3.) Using the line drawing tool, graph the monopoly's average cost curve. Label this curve...
A monopoly has a constant marginal cost of production of $2 per unit and no fixed costs. In the figure to the right, let D be demand and MR be marginal revenue. TTT 1.) Using the line drawing tool, graph the monopoly's marginal cost curve. Label this curve 'MC.' 2.) Using the line drawing tool, graph the monopoly's average variable cost curve. Label this curve 'AVC.' p, $ per unit 3.) Using the line drawing tool, graph the monopoly's average...
a) Differentiate between monopolistic and monopoly market structures. b) The short-run average total cost curve and the long-run average total cost curve are similarly shaped. What are the causes for the short run and long-run average total cost curve to slope down and up? c) What is natural monopoly and how is it related to economies of scale? d) Mr. Salim has been working at a car manufacturing plant forthe last 4 years. He recently lost his job due to...
Most questions answered within 3 hours.
-
How many moles are in 169 kg of Au?
asked 3 minutes ago -
If
a measure entity (thing) is a vector how many different types of
information are required...
asked 7 minutes ago -
A speeding driver sees a police officer, hits her brakes, and
changes her speed from 45...
asked 7 minutes ago -
Calculate the Molarity, M, of a solution that was prepared by
dissolving 734 grams of lithium...
asked 9 minutes ago -
Give a chemical reaction for the reaction of 2-butanol with
chromium trioxide
asked 20 minutes ago -
Community relations are a large part of business outreach and
growing a brand. If you've been...
asked 29 minutes ago -
One way to measure the amount of energy that is expended during
exercise is to use...
asked 25 minutes ago -
What is the Erikson 8 stages of development theory’s relevance
and application to individuals, families, groups,...
asked 38 minutes ago -
Consider a dataset on house sales that is used to regress Y =
selling price of...
asked 43 minutes ago -
True or false. Please explain your answer.
If you are choosing between two different sizes of...
asked 45 minutes ago -
HBR Article: How to Act Quickly Without Sacrificing Critical
Thinking
Read the attached Harvard Business Review...
asked 57 minutes ago -
if
we have a large voluntary respond sample consistings of weights of
subject who choose to...
asked 59 minutes ago