3. Natural monopoly analysis The following graph gives the demand (D) curve for 5G LTE services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local 5G LTE company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per gigabyte of data) 2 20 18 16 14 12 10 8 6 ATC MC MR 0 0 1 2 3 4 5 6 7 8 9 10 QUANTITY (Gigabytes of data) D Monopoly Outcome Which of the following statements are true about this natural monopoly? Check all that apply. In order for a monopoly to exist in this case, the government must have intervened and created it. The 5G LTE company is experiencing economies of scale. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The 5G LTE company must own a scarce resource. True or False: Without government regulation, natural monopolies never earn zero profit in the long run. True False

What are the four most important ways a firm becomes a monopoly? Will a monopoly that maximizes profit also be maximizing revenue? Will it be maximizing output? Explain.  Assume the graph below represents the market for a monopolist. What quantity will the monopolist produce, and what price will she charge? What will her total revenue, costs, and profit be at this production level? What will the deadweight loss for society be at this level of production? (Assume the MC curve is a straight line between the relevant points for this calculation.)

What is the quantity that maximizes social surplus? Explain. How much worse off is society as a result of this industry being monopolized? Show this on a graph and calculate the amount. Info needed in image below

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The following graph gives the demand (D) curve for water services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local water company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. PRICE (Dollars per hundred cubic feet) 40 36 32 28 24 20 0 0 1 2 3 5 6 7 8 QUANTITY (Hundreds of cubic feet) MR 4 True ATC MC O False 9 10 D The water company is experiencing economies of scale. Which of the following statements are true about this natural monopoly? Check all that apply. + Monopoly Outcome The water company must own a scarce resource. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. In order for a monopoly to exist in this case, the government must have intervened and created it.…

Use the following graph of a monopoly market to answer this question: P $13 $10 150 300 Which of the following statements is an accurate interpretation of the graph? This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 150 are willing to pay exactly $10. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 150 consumers willing to pay between $10 and $13. This firm engages in price discrimination by negotiating on price with each of its customers. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 300 consumers willing to pay between $10 and $13. This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 300 are willing to pay exactly $10.

In the linear example illustrated in the figure to the right, how does charging the monopoly a specific tax of t = $8 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes tax revenue)? What is the incidence of the tax on consumers? Determine how imposing the tax affects the monopoly optimum. Use the line drawing tool to show how the tax affects the monopoly's cost of production by drawing a new marginal cost curve with the tax. Label this line 'MC¹'. Carefully follow the instructions above, and only draw the required objects. p, $ per unit 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 0 2 3 4 MC D MR 5 6 7 8 9 10 11 12 13 Q, Units per day

Monopoly - End of Chapter Problem Download Records decides to release an album by the group Mary and the Little Lamb. It produces the album with no fixed cost, but the total cost of creating a digital album and paying Mary her royalty is $6 per album. Download Records can act as a single-price monopolist. Its marketing division finds that the demand schedule for the album is as shown in the accompanying table. a. Calculate the total revenue and marginal revenue per album for P = $16, $14, and $12. TRP $16: $ TRP $14: $ Price of album $22 20 18 16 14 12 10 8 Quantity of albums demanded 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Q14 Monopolists, like firms in other market structure, strive to maximize profit. Microsoft when it first came out with its Windows operating system was thought to be a monopolist. Assume that Microsoft is a monopolist and calculates that at its present output level, marginal cost is $5.50 and marginal revenue is $4.50. Microsoft could increase profits by Multiple Choice   decreasing output and leaving price unchanged.   increasing price and decreasing output.   decreasing price and increasing output.   leaving both quatity and price unchanged.   decreasing price and leaving output unchanged.

Consider the electricity industry, in which there are very large fixed costs but also in which variable costs are directly proportional to total output so that the marginal cost of each unit produced is small and constant.    a) Assuming that one firm has an electricity monopoly, draw a diagram that shows the price the monopolist charges and the quantity the monopolist sells at this price. Be sure to include marginal cost, average total cost, marginal revenue, and demand curves in your diagram.   What happens if the electricity industry is perfectly competitive? More specifically, let us assume that the marginal cost curve from part (a) is equal to the perfectly competitive market supply curve. In this case, show in a diagram what the perfectly competitive equilibrium price and quantity in this industry are. What will happen to the number of firms producing electricity in the long run? What does this say about the desirability of monopoly vs. perfect competition in this industry?…