Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has...
Check my work Suppose you have been tasked with regulating a single monopoly firm that sells 50-pound bags of concrete. The firm has fixed costs of $10 million per year and a variable cost of $1 per bag no matter how many bags are produced Instructions: Enter your answers as whole numbers. In part e, round your answer to 2 decimal places. a. If this firm kept on increasing its output level, would ATC per bag ever increase? Click to...
A local electric utility provider is a considered by regulators to be a natural monopoly. It has fixed costs of $100 million and a constant marginal cost of $0.25 per KWH. Its demand curve is linear: ?=160−0.00001? where ? is the price per KWH and Q is the quantity demanded by consumers in KWH per year. a. Confirm that this utility provider is a natural monopoly. [HINT: It might be helpful to use Excel for this exercise.] b. Find the...
please make sure you answer all the questions, thank you 9. Regulating a natural monopoly Consider the local telephone company, a natural monopoly. The following araph shows the monthly demand curve for phone services and the company's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves 100 90 80 70 60 50 40 ATC MO 30 20 10 MRI I 20 16 18 4 6 810 12 14 2 QUANTITY (Thousands of subscriptions) PRICE (Dollars per sub...
1) A monopolist firm sells its output in two regions: Califomia and Florida. The demand curves for each market are QF15-PF OF and Qc are measured in 1000s of units, so you may get decimal values for Q. If P-$10 and Q-1, the profit of S10 that you calculate is actually $10,000). Qc 12.5 - 2 Pc The monopoly's cost function is C 5+3Q5+3(QF+Qc) First, we'll assume that the monopoly can only charge one price in both markets. a) Calculate...
You are the manager of a monopoly that faces an inverse demand curve P = 100 - 10Q and has constant average and marginal costs of $20 per unit. The government is considering legislation that would regulate your firm's price at $20 per unit. (a) What is the profit-maximizing quantity at the regulated price? Please show your calculations. (b) What is the profit (or loss) at the regulated price or quantity? Please show your calculations. (c) Can this firm continue...
Price/Cost ($) 7) Monopoly II (6 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below. The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market. 501 ATC AVC a. What is the firm's profit-maximizing level of output? Label this on the graph. b. What price will the monopolist charge for that level of output? Label this on the graph....
A monopoly sells in two countries . The demand curves in the two countries are p1 = 12−q1, and p2 = 48−q2. The monopoly’s MC is $4. Now, suppose a long-running trade war between the two countries comes to an end, allowing resales between the two countries. The monopoly is now forced to charge the same price in both countries. The monopoly would have two options: (1) Sell at a price low enough (lower than 12), so that consumers from...
Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 50 million pounds per year. Suppose the Surgeon General issues a report saying that eating chicken is bad for your health. Part 1: The Surgeon General’s report will cause consumers to demand a) more b) less chicken at every price. Part 2: In the short run, firms will respond by a) producing less chicken and running at a...
Consider the local telephone company, a natural monopoly. The following graph shows the demand curve for phone services, the company's marginal revenue curve (labeled MR), its marginal cost curve (labeled MC), and its average total cost curve (labeled ATC). You can hover over the points on the graph to see their exact coordinates. PRICE, COST, MR (Dollars per month) 100 90 80 70 60 Demand 50 40 30 ATC 20 MC 10 MR 54 60 30 36 42 48 0...
Please explain in details with step by step solution, Thank you very much cLyon Concrete is a monopoly supplier of concrete in Penang. Demand for the firm's concrete is given by P 110-40 Marginal cost (MC) is constant and equal to 10. i) What are the profit-maximizing price and output? (4 marks) ii) Demonstrate your answers to part ) using an appropriate diagram. (5 marks) ii) What is the deadweight loss resulting from Lyon's monopoly? (4 marks) iv) Compared to...