Monopoly and Marginal Cost

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

d. Calculate the price elasticity of demand in each market and discuss these in relation to the prices to be charged in each market.

equilibrium. The new company is now run as a monopoly, and this paper shall explain

5. Suggest three (3) reasons a monopoly may or may not be efficient in any economy.

Explain how a profit maximizing firm determines its optimal level of output, using marginal revenue and marginal cost as criteria:

Two-part pricing: A local surf store estimates that their average customer 's demand per year is P = 3.5 - 0.5Q, and knows that the marginal cost of each rental is $0.5. a- How much should the store charge for an annual membership in order to extract all the consumer surplus using an optimal two-part pricing strategy? b- How much should the store charge for each rental if it uses an optimal two-part pricing strategy?

1) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

Firm under perfect competition and the firm under monopoly are similar as the aim of both the seller is to maximize profit and to minimize loss. The equilibrium position followed by both the monopoly and perfect competition is MR = MC. Despite their similarities, these two forms of market organization differ from each other in respect of price-cost-output. There are many points of difference which are noted below.

For the monopoly market described in Table X below, what is the profit maximizing price determined by the monopolist?

1) If a monopolist's price is $65 a unit and its marginal cost is $25 for the last unit produced,

8. Compared to a perfectly competitive industry with the same demand and cost curves, a monopoly’s price and output will be which of the following?

2. What are the differences among horizontal, vertical, and conglomerate mergers? Provide real-world examples of each type of merger. What policy do you think the US should follow toward mergers? Why?

Do you think Indian Railway is an example for monopoly market? What are the types of price discrimination that Indian railway practice?

What is a monopoly? According to Webster's dictionary, a monopoly is "the exclusive control of a commodity or service in a given market.” Such power in the hands of a few is harmful to the public and individuals because it minimizes, if not eliminates normal competition in a given market and creates undesirable price controls. This, in turn, undermines individual enterprise and causes markets to crumble. In this paper, we will present several aspects of monopolies, including unfair competition, price control, and horizontal, vertical, and conglomerate mergers.

a) Draw Brennan's average total, marginal revenue and marginal cost curves. (Hints: calculate total revenue (P* times Q) first, and then calculate MR)