A monopoly firm maximizes its profit by producing 500 units output (so Q = 500). At that level of output, its marginal revenue is $32, its average revenue is $42, and its average total cost is $36. Refer to Scenario 15-2. What is the firm's profit-maximizing price? . a. $32 x b. between $33 and $36 C. $42 d. between $37 and $41
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- Can you think of any examples of successful predatory pricing in the real world?Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or why not?Imagine that you ale managing a small firm and thinking about entering the market of a monopolist. The monopolist is currently charging a high price, and you have calculated that you can make a nice profit charging 10 less than the monopolist. Before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?
- A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is aconstant $30 per book.a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profitmaximizing publisher choose? What price would it charge? b. Compute marginal revenue. (Recall that MR=∆TR/∆Q.) How does marginal revenue compare tothe price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do themarginal-revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price…A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $30 per book.d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economicefficiency. What price would it charge for the book? How much profit would it make at thisprice? (9See Hint Suppose seven individuals enjoy going to the comedy club. Their demand is as follows Person Willingness to pay Allison Beatrice Cally David Ezekiel Francesca Gertrude 40 36 32 28 24 20 16 Suppose the comedy club had a monopoly and a marginal cost of $7per entrant. Suppose the club could perfectly price-discriminate. That is, it could charge each customer a different price equal to his or her maximum willingness to pay, How comedy club sell? many tickets would the SUBMIT ANSWER 16/17> 9 OF 17 QUESTIONS COMPLETED MacBook Pro
- O See Hint Suppose seven individuals enjoy going to the comedy club. Their demand is as follows. Person Willingness to pay Allison Beatrice Cally David Ezekiel Francesca Gertrude 20 18 16 14 12 10 8 If the comedy club had a monopoly and a marginal cost of $7 per entrant, the comedy club would sell charge only one price. tickets if it could 15/17> SUBMIT ANSWER 9 OF 17 QUESTIONS COMPLETED MacBook ProAn unregulated natural monopoly bottles Elixir, a unique product with no substitutes. The monopoly's Ktotal flaxed cost is $150,000 and its marginal cost is 20 cents a bottle. How many bottles of Elixir does the monopoly sell and what is the price of a bottle of Elixir? is the monopoly's use of resources efficient? CELL The graph shows the demand curve for Ex Draw the marginal revenue curve. Label it MR Draw the marginal cost curve. Label it MC. Draw a point at the monopoly's profit-maximizing quantity and price Elixir sells million bottles a year and the price is cents a bottle >>>Answer to 2 decimal places The firm produce the efficient quantity because OA does not marginal benefit equals marginal cost OB. does not marginal benefit exceeds marginal cost OC does; marginal revenue equals marginal cost OD does, marginal benefit equals marginal cost 604 00- 40 30+ 20 304 Price and cost (cents per bottle) D Quantity (millions of bottes per year) > Draw only the objects specified in the…Price and cost (dollars per unit) LE MC F В 40 30 ... H. 20 MR 800 1,000 Quantity (units) Use the figure above to answer this question. If a monopoly maximized profit, 1,000 units will be produced and a deadweight loss equal to area ABC will occur 800 units will be produced and a deadweight loss equal to area ABC will occur 800 units will be produced and a deadweight loss equal to area EFB will occur