Give explanation of every questions and take like 2. The following figure represents a perfectly competitive industry that is taken over by asingle firm and operated as a monopoly.2Price (dollars per unit)لاNP₁0Q₁MRQ2MCQuantity (units per hour)(a) What was the competitive price and quantity?(b) What is the monopoly price and quantity?(c) What area represents consumer surplus under perfect competition?(d) What area represents consumer surplus under monopoly?(e) What area represents the dead weight loss of monopoly?

"As per the policy, we can provide a solution to the first three subparts. Kindly raise the question…

2. The following figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly. Price (dollars per unit) 3⁰ P₂ 5 0 Q₁ MR Q₂ 1 MC (a) What was the competitive price and quantity? (b) What is the monopoly price and quantity? D Quantity (units per hour) (c) What area represents consumer surplus under perfect competition? (d) What area represents consumer surplus under monopoly? (e) What area represents the deadweight loss of monopoly?

2. The following figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly. Price (dollars per unit) 3⁰ P₂ 5 0 Q₁ MR Q₂ 1 MC (a) What was the competitive price and quantity? (b) What is the monopoly price and quantity? D Quantity (units per hour) (c) What area represents consumer surplus under perfect competition? (d) What area represents consumer surplus under monopoly? (e) What area represents the deadweight loss of monopoly?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Monopoly

Section: Chapter Questions

Problem 4.5P

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Similar questions

How is monopoly different from perfect competition?
How is the demand curve perceived by a perfectly competitive firm different from the demand curve perceived by a monopolist?
What is a natural monopoly?
(a) What is meant by consumer surplus and producer surplus? Using a diagram show that there is a deadweight loss to society from monopoly in terms of total surplus. (b) In what ways is a monopolistically competitive firm likely to be less efficient than one under perfect competition?
4. A monopolist is faced with the following cost and revenue curves: $ 80 70 60 50 40 30 20 10 0 -10 0 -20 100 200 300 400 FMC 500 AC AR 600 MR Quantity (a) What is the maximum-profit output?. (b) What is the maximum-profit price? (c) What is the total revenue at this price and output? (d) What is the total cost at this price and output? (e) What is the level of profit at this price and output? (f) If the monopolist were ordered to produce 300 units, what would be the market price? (g) How much profit would now be made? (h) If the monopolist were faced with the same demand, but average costs were constant $60 per unit, what output would maximise profit? (i) What would be the price now? (j) How much profit would now be made? (k) Assume now that the monopolist decides not to maximise profits, but instead sets a price of $40. How much will now be sold?.
(a) If you are the owner of the only bookstore in a small town, do you have a monopoly? Explain. (b) Draw graph and explain the inefficiency of a monopoly firm such as public sector provision of electricity.
Price (Dollars per Garment) 7 D E 5 АС-МC Demand Marginal Revenue 20 Garments cleaned per year (millions) The long run average and marginal cost of dry-cleaning services is $5, as shown in the graph. Given the demand curve and the marginal revenue curve shown in the graph, which of the following is true? Select one: O . If the industry were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $7 per garment. Ob. If the industry were perfectly competitive, 10 million garments would be cleaned each year. If the market were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $5 per garment and monopoly economic profit would be zero. O d. If the industry were perfectly competitive then the long-run equilibrium price of dry-cleaning services would be $7 per garment.
10. Examine this information for a monopoly product. Price Quantity SR10.00 1000 8.00 2000 6.00 3000 4.00 4000 2.00 5000 .5 6000 a. Calculate total revenue. b. Calculate marginal revenue. c. What is the maximum output that the producer of this product would ever produce? d. Why would this firm never produce more than the output amount in part (c)? С.
3 13 out of question The graph below shows the demand, revenue and cost curves for a monopoly operating in the short run. Use the graph to answer the questions that follow: Price and costs (dollars per unit) 5 4 3 لیا 2 0 20 MC 40 MR 60 80 100 120 Quantity (units per day) What is the consumer surplus given change from monopoly to perfect competitor? ATC D
Question 38 An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will OA. raise its price and move to the segment of the demand line where PED exceeds 1 in absolute value. B. raise its price, increase its output, and move the segment of the demand line above the point where PED equals 1. OC. lower its price, increase its output, and shift to the segment of the demand line where PED exceeds 1 in absolute value. O D.continue to produce this level of output because any change will lower its profit.
2. Given the following diagram, answer the questions. a) What is the price and quantity for monopoly? b) What is the price and quantity for perfect competition? c) Calculate the consumer surplus under perfect Price/Cost 30 competition. d) Calculate the consumer surplus under monopoly. e) Calculate the profit taken away as the profit but the firm. 20 f) What is the deadweight loss due to rent seeking? MC-AC 10 MR 50 100 Quantity
2. Entry or exit in the long run Fantastique Bikes is a company that manufactures bikes in a monopolistically competitive market. The following graph shows Fantastique's demand curve, marginal revenue curve (MR), marginal cost curve (MC), and average total cost curve (ATC). Place the black point (plus symbol) on the graph to indicate the short-run profit-maximizing price and quantity for this monopolistically competitive company. Then, use the green rectangle (triangle symbols) to shade the area representing the company's profit or loss. 500 450 Monopolistically Competitive Outcome 400 350 300 Profit or Loss A ATC 250 200 150 MC 100 50 MR Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bikes) Given the profit-maximizing choice of output and price, the shop is earning profit, which means there are shops in the industry than in long-run equilibrium. PRICE (Dollars per bike)