Question

What are the steps for profit/loss calculation in the pure monopoly

Using the TR-TC approach when is profit at the maximum?

Meaning of X- Inefficiency

Meaning of rent-seeking behavior?

In which market structure X-inefficiency is found.

In which market structure price discrimination is found

Definition of price discrimination

Does price discrimination charge the same price to all

Is price discrimination always legal?

Define economic cost?

Calculate accounting profit

Answer 1

• Monopoly output is calculated when MR = MC and price is extended till AR curve on that output level. Price occurs when ATC is less than price and loss occurs when ATC is greater than this price. Here is case of profit which is marked as shaded region.
  bring EL Profit ATC Co Quantity
  
• When the gap between TR and TC is greatest and TR is greater, the profit is maximized. In the below figure, it is happening when the output level is Q*.
  Date TRIC Olatz at Output
  
• X inefficiency occurs when there is lack of incentive to labor to produce goods due to less competitive behavior.
• Rent seeking involves raising share of current wealth without creating new wealth. It reduces efficiency overall as it raises inequality and misallocation of resources. Government then have to step in to reallocate resources among people to raise efficiency.
• Monopoly market can be seen with less worker effort because due to less perfect competition, they do not have any desire to produce more goods.
• Price discrimination can be found in monopoly market.
• Price discrimination occurs when the sellers charges customers different price for the same product.
• No, it charge different amount.
• It is legal if it is done on the basis of willingness to pay while it is illegal if it is done on the basis of caste, religion or color.
• Economic cost is calculated as Accounting cost + Opportunity cost or that cost which can be measured in other form than money.
• Accounting profit is calculated as Economic profit + Implicit cost or it is the company total earning.