Which of the following statement is correct? A. Both a competitive firm and monopolist are price takers. B. A competitive firm is a price taker, whereas a monopolist is a price maker. C. A competitive firm is a price maker, whereas a monopolist is a price taker. D. A competitive firm and a monopolist are price makers.

Which of the following statement is correct? A. Both a competitive firm and monopolist are price takers. B. A competitive firm is a price taker, whereas a monopolist is a price maker. C. A competitive firm is a price maker, whereas a monopolist is a price taker. D. A competitive firm and a monopolist are price makers.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter24: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 15CQ

See similar textbooks

Similar questions

(4) Use Figure Four on page 10 to answer (4). In the long run: a)what is the monopolist’s output? _______________________ b) what is the monopolist’s price? _________________________ c) is the monopolist technologically efficient? If so, why? If not, what is the monopolist’s technologically efficient output level?
a. At what output rate and price does the monopolist operate? b. In equilibrium, approximately what is the firm’s total cost and total revenue? c. What is the firm’s economic profit or loss in equilibrium?
Suppose both a monopolist and a perfectly competitive firm charge a price corresponding to the quantity at the intersection of the marginal cost and marginal revenue curves. If this price is between each firm's average variable cost and average total cost curves, a. both firms will shut down in the short run. b. both firms will continue to operate in the short run. c. the perfectly competitive firm will continue to operate in spite of the loss but the monopolist will earn a profit. d. the perfectly competitive firm will continue to operate in the short run but the monopolist will shut down.
Which of the following is true for a monopolist that engages in perfect price discrimination? a. There is more consumer surplus than exists with a regular monopoly. b. The firm sells the profit-maximizing quantity of the regular monopolist but charges each consumer a price higher than the regular monopoly price. c. The monopolist sells the allocatively efficient quantity of output. d. The monopolist further restricts output compared to the regular monopoly, creating greater deadweight loss. e. The monopolist no longer faces a downward-sloping demand curve, becoming a price taker.
Sara is a single-price, profit-maximizing monopolist who sells her own patented perfume (shown in the graph below). a. What is the equilibrium price and quantity under monopoly conditions? b. If instead Sara had to operate like a competitive firm, what would be the equilibrium price and quantity? c. What is the deadweight loss and total loss to consumer surplus when Sara operates as a monopoly? d. How much surplus would Sara have if she could act as a perfectly price-discriminating monopolist?
hey how are you a)Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost. b)Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c)Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly.
a. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost. b. Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly. Kindly answer all the sub parts.
Given a graph below. A. Name all the lines or curves. B. Identify the pricing behavior of a monopolistwith predatory pricing and identify the profit if a monopolist acts a true monopolist. Explain thepossible relationships among the curves.
Which statement is NOT correct? a. Monopolists charge higher prices than do competitive firms. b. Monopolists always earn a positive economic profit, whereas competitive firms may incur losses. c. Monopolists are price makers; competitive firms are price takers. d. Monopolists tend to be inefficient because they do not face the same market pressures as competitive firms.
1. Briefly explain why the following statements are TRUE or FALSE: 1. A monopolist produces the quantity at which MC = MR. 2. A monopolist sets a price equal to MR. 3. A monopolist faces a downward- sloping MR curve. 4. A monopolist faces a perfectly elastic demand curve. 5. A monopolist must lower price if it produces additional units. 6. A monopolist is always able to price discriminate.
Answer the following questions on the basis of the monopolist’s situation illustrated in the following graph. a. At what output rate and price does the monopolist operate? b. In equilibrium, approximately what is the firm’s total cost and total revenue? c. What is the firm’s economic profit or loss in equilibrium?
Identify and Graphically illustrate the similarities or differences between a perfectly competitive firm and a monopolist. a. Compare the demand curve for a perfectly competitive firm and a monopolist. b. Compare the price charged by a perfectly competitive firm and a monopolist. c. Compare the amount of consumers’ surplus received by buyers under a monopoly with the amount received under perfect competition.