2.5 The following diagram illustrates the demand curve facing a monopoly in an industry with no economies or disecono- mies of scale and no fixed costs. In the short and long run, ATC. Copy the diagram and indicate the following: MC %3D $ bontint boi co MC = ATC cn D Lfor Output, Q a. Optimal output b. Optimal price c. Total revenue d. Total cost e. Total monopoly profits f. Total "excess burden" or "welfare costs" of the monopoly (briefly explain)

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter9: Monopoly
Section: Chapter Questions
Problem 2.3P
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2.5 The following diagram illustrates the demand curve facing
a monopoly in an industry with no economies or disecono-
mies of scale and no fixed costs. In the short and long run,
MC
ATC. Copy the diagram and indicate the following:
$
nd
MC = ATC
te
Output, Q
a. Optimal output
b. Optimal price
c. Total revenue
d. Total cost
e. Total monopoly profits
f. Total "excess burden" or "welfare costs" of the monopoly
(briefly explain)
Transcribed Image Text:2.5 The following diagram illustrates the demand curve facing a monopoly in an industry with no economies or disecono- mies of scale and no fixed costs. In the short and long run, MC ATC. Copy the diagram and indicate the following: $ nd MC = ATC te Output, Q a. Optimal output b. Optimal price c. Total revenue d. Total cost e. Total monopoly profits f. Total "excess burden" or "welfare costs" of the monopoly (briefly explain)
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