8 23 20 15 0 9 12 MC ATC D MR If the business is behaving in a way that maximizes its profit, then a) The quantity it will produce is: units b) The price it will charge is: c) The profit it will earn per unit sold is: d) The total profit it will earn is:
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- Review the graph at right for a monopoly market (enter all of your responses as whole numbers). Price 100- 90- MC How much is the consumer surplus? $ 80 70- 160 60- 50- 40- 30 30- 20- 10- MR 40 50 60 Quantity 0- 80 90 tv 80 esc F1 F2 F3 F4 F5 F6 F7 FR 2$ % & 1 4 7 8 Q W E R T Y tab A S つ caps lock C V B ift fn control option command つ エThe graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the long run? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.
- Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction. (a) Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (b) Assuming costs remain constant and that that the construction industry is still allowed to operate normally, explain the impact of Sydney’s lockdown on builder XYZ’s demand from Q2 part (a). With the aid of a new diagram, discuss XYZ’s static profit or loss situation after these changes. Clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (c) Assume that XYZ survives the lockdown and stays in business. If the NSW government decides to double the first home buyer’s grant, explain the impact on XYZ’s demand. With the aid of a new diagram, discuss XYZ’s static profit or loss situation after this…The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow. "image" i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.Price and cost (dollars per subscription) 64.00 58.00 48.40 40.00 MR MC ATC D 32 80 Quantity of cable subscriptions (per month in thousands) Q
- 1. The following graph depicts a monopoly. a. Label the demand curve with the letter 'D', the marginal revenue curve with the letters 'MR', and the marginal cost curve with the letters 'MC' b. Label the quantity in a competitive market 'Qc', the price in a competitive market 'Pc', the quantity a monopoly would sell 'Q', and the price a monopoly would charge 'PM'. c. Shade in the area represents the decrease in consumer surplus of going from a perfectly competitive setting to a monopoly. Briefly describe why this change in consumer surplus occurs.a. What is the main constraint of a monopoly? b. Consider the company Luxottica which is responsible for almost all of the production of eyeglasses in the world. to compete with this company, a newcomer would need a huge amount of money, for example, just to start an assembly line. these high costs can be considered an example of what concept?Exercise 5. You are the manager for a monopoly with costs, demand, and marginal revenueas in the graph at the top on Figure 1.a. Does the fact that you operate in a monopoly always guarantee that you can achievehigher profits by increasing the price? Explain.b. Draw the area representing the profits on the top graph on Figure 1.c. Suppose one of your suppliers just announced an increase in prices for a specific partthat your product requires. What should the impact be to each of the curves on thetop graph of Figure 1? Explain carefully.d. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.ii. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.
- Consider the relationship between monopoly pricing and price elasticity of demand.a. Explain why a monopolist will never produce a quantity at which the demand curve isinelastic. (Hint: If demand is inelastic and the firm raises its price, what happens to totalrevenue and total costs?)b. Draw a diagram for a monopolist, precisely labeling the portion of the demand curve thatis inelastic. (Hint: The answer is related to the marginal- revenue curve.)c. On your diagram, show the quantity and price that maximize total revenue.The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow.i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd.iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the long run? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.O OO The above graph shows the market demand function for a product. Assume that the market is served by a perfectly-price-discriminating monopolist with a constant marginal cost of production equal to $4 (MC = $4) and no fixed cost (FC = 0). The deadweight loss equals: DWL - $72 DWL - $0 DWL- -$48 DWL - $84 DWL-$36 $30 $28 $26 $24 $22 $20 Question 23 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
