enjoying pure monopoly about suffering losses because it has power to set its prices at any level it desires. b. Both moving average and exponential smoothing techniques are suitable for long-term forecast. c. A decision maker must always use the historical cost of raw materials in making an economic decision. d. Generally speaking, the higher the percentage spent on a product, the more price elastic of that product, and vice versa. e. The portion of the long-run cost curve that is horizontal indicates that the firm is experiencing neither economies nor discconomies of scale. f. The rational firm will try to operate most efficiently by producing at the point where its average cost is minimized.

enjoying pure monopoly about suffering losses because it has power to set its prices at any level it desires. b. Both moving average and exponential smoothing techniques are suitable for long-term forecast. c. A decision maker must always use the historical cost of raw materials in making an economic decision. d. Generally speaking, the higher the percentage spent on a product, the more price elastic of that product, and vice versa. e. The portion of the long-run cost curve that is horizontal indicates that the firm is experiencing neither economies nor discconomies of scale. f. The rational firm will try to operate most efficiently by producing at the point where its average cost is minimized.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.2P

See similar textbooks

Similar questions

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. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.b. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.c. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.
es to th X + essment/take/launch.jsp?course_assessment_id%-329092 1&course_id=_179915_1&content_id%=_9975185_18&step3Dnull QUESTION 1 Match these types of prices to their description by writing in the best choice in each blank. A. Term used by Middle Age philosophers to describe pricing such that justice is served. Equilibrium Price B. Price in a Free Market Term used to describe the inherent price of goods. Some think this is determined by the cost of production. . Going Price D. Just Price The price of an economic good such that the amount of E. it that buyers wish to purchase in a certain time period is equal to the amount sellers are offering for sale. Natural Price The amount a willing seller will take and a willing buyer will pay. That range of prices for a good at which sellers can dispose of most of their goods and buyers with some intensity of demand for the good will be satisfied.
a. b. If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15. Using the mark-up rule, what is the optimal price for the firm to charge? If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the mark-up rule to find the new optimal price for the firm to charge? What is the defining feature of a Pure Selling Problem and what impact does it have one the firm's goal to maximize profit?
The global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. a. If PFIZER is the sole vaccine provider given the following information, answer the questions below: Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 Given the tabular information above find the profit-maximizing output and price also illustrate the same using the two-dimensional labeled diagram. Show the calculation as well. b. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER…
Determine the profit maximization point of a firm in a graph showing the dynamics of the Production and Cost Function. Supoose you are given this data of a monopolist. The price of the product is 35 pesos. 1. Compute for the- total cost, Average variable cost, marginal cost, total revenue, marginal revenue.2. Graph the schedule and answer the following question. - did the firm able to maximize its profit? If yes identify at what level (Quantity/output) or highlight the profit maximization point in the graph. If no, cite the reason why the firm was not able to maximize profit. Elaborate you explanation through you analysis on the Dynamics of the cost and output.
Problem 3 uppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is E-12, while the price elasticity of demand for leisure travelers is Ey-24. The airline wants to set the prices separately for business and vacation travelers. Economy Firat Class Only i the marginal cost of transporting each passenger is the same, und the airline is able to separate the two groups perfoctly, what is the optimal surcharge (in ) on business travelers? Oor example. fleiture travelers pay 100, and business ravelers pay 200, then the surcharge is 100%) Anvwer b) Suppose that in order to separste business travelen, the airline must offer them slightly better conditions on board (for enample, serve them a meal). As a resul, the marginal cost of flying a basiness traveler is 30% higher than for a leivare traveler. What is the optimal surcharge (in ) on business fravelers in this case? Awwer Now suppose the airline introdaces a Basi Economy fare,…
1. Draw a graph of a typical natural monopoly with declining costs. a. Label monopoly price and quantity. Identify the area of deadweight loss when the monopoly chooses the profit-maximizing level of output. b. Label marginal cost price and quantity. i. How will the area of deadweight loss be impacted with marginal cost pricing? ii. What are the drawbacks to this approach? c. Label fair return price and quantity. What are the pros and cons of fair return pricing? d. What is incentive regulation? What are the positive and negative impacts of this strategy?
Assume inverse demand function for game console in an imaginary country is P=1200-4Q and the total cost function is TC=400+4Q². Government put $120 of specific tax on production. a. If the market is competitive what is the incidence of tax on consumer? b. If the market is monopolist what is the incidence of tax on consumer?
tue or false? after an industry is regulated by federal regulatory agency, companies in the industry can maintain their long run vaibility by continuing to focus on making better products or services.
If a market is supplied by a monopoly, then we expect... Oa. The firm to sell at a price above marginal cost Ob. The firm to have zero economic profit OC. The firm to face inelastic demand d. The firm to produce high output O e. The firm to have low marginal cost A Moving to another question will save this response.
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…
Give typing answer with explanation and conclusion A monopolist has a demand curve given by P = 88 − Q and a total cost curve given by TC = 34 + Q2. The associated marginal cost curve is MC = 2Q. Suppose the monopolist also has access to a foreign market in which he can sell whatever quantity he chooses at a constant price of 60. How much will he sell in the foreign market? What will his new quantity and price be in the original market?