a) In 1938 Congress amended the FTC Act. What additional power did this amendment create? b) What is the economic rationale for consumer protection regulation? c) What issue was addressed by the Robinson-Patman Act?
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a) In 1938 Congress amended the FTC Act. What additional power did this amendment create?
b) What is the economic rationale for consumer protection regulation?
c) What issue was addressed by the Robinson-Patman Act?
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- For parts a and b) Suppose demand for my product is given by: P = 1000 - 0.6Q if my rivals react to my price change and P = 500 - 0.1Q if my rivals do not react to my price change. a) What level of output corresponds to the kink in my demand curve? b) If my marginal costs increased from 150 to 250 would I change my price and output? c)What is the difference between economic regulation and social regulation?119) The Waxman-Hatch Act of 1984 tried to balance which two important policy goals? a) Protecting brand name drug manufacturers and reducing the cost of generics b) Protecting brand name drug manufacturers and ensuring costumers get generic drugs rapidly c) Protecting generic drug manufacturers and reducing generic drug testing requirements d) None of the abovesuppose CLP Holdings Limited is a natural monopolist with constant marginal cost. (1) draw a diagram to indicate the profit-maximizing level of output, the profit maximizing price, and the size of the profit (2) if the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm's marginal cost or its average total cost? explain in detail with diagram in part (1)
- Question 6 Please state if the following sentences concerning the regulation of the electricity sector are true or false. a) In a reasonably large electricity market, it is efficient to let electricity generators compete to sell electricity on the wholesale market. b) In a liberalized electricity market the regulator has no influence on the final electricity price paid by consumers. c) The cost function of the electricity transmission grid is such that the marginal cost is always lower than the average cost for the relevant size of the market. d) Economists agree that competition in electricity retailing is always beneficial to all consumers. e) The energy transition consists in ensuring a reliable electricity supply to all consumers at a fair price.Monopoly and Price Elasticity Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, quantity would fall by a (LARGER AND SMALLER) percentage than the rise in price, causing profit to (DECREASE OR INCREASE) . Therefore, a monopolist will (ALWAYS, NEVER OR SOMETIMES) produce a quantity at which the demand curve is elastic. Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal-revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR).We learned that in a competitive market equilibrium the Marginal Cost equals the Price, as Marginal Revenue is the same as Price for a perfectly competitive seller. Now, how does the Marginal Cost compare to Price at the monopolist's profit maximizing output and price combination? If Price is generally seen as the monetized Marginal Benefit to consumers of the product and Price exceeds Marginal Cost, then this is allocatively inefficient, as Marginal Benefit exceeds Marginal Cost.
- If the inverse demand curve is p=100-Q and the marginal cost is constant at $10, how does charging the monopoly a specific tax of t= $12 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes the tax revenue)? What is the incidence of the tax on consumers? As a result of the tax, the profit-maximizing quantity decreases by 6 units and the profit-maximizing price increases by $6. (Enter numeric responses using real numbers rounded to two decimal places.) Show Transcribed Text Consumer surplus by $ The monopoly's surplus (producer surplus) Finally, society's welfare by $. The consumer incidence of the tax is%. by S.Suppose CLP Holdings Limited is a natural monopolist with constant marginal cost. Draw a diagram to indicate the profit-maximizing level of output, the profit-maximizing price, and the size of the profit. If the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm’s marginal cost or its average total cost? Explain in detail with the diagram.Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, quantity would fall by a ▼. Therefore, a monopolist will Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). Price 10 9 CO 7 6 S E 2 0 -2 Demand Search percentage than the rise in price, causing profit to produce a quantity at which the demand curve is elastic. Marginal Revenue 86 Inelastic Demand e + Max TR C ? (CC Speaker/Headph A
- What are the objectives of regulators? Under what conditions is regulation most likely to raise welfare?Fill-up the following table relating to monopoly operations and regulations given the following total cost and inverse demand functions: Total Cost: TC = Q2 + 100;Inverse Demand: P = 120 – Q No regulation MC-Pricing (MC=P*) w/ Lump Sum Tax (T=75) w/ Specific Tax (t=10) Profit Equation Q* P* TR at Q* TC at Q* Profit at Q* Tax Revenue Consumer Surplus Producer Surplus Deadweight loss 2. Choose one type of regulation you analyzed in #1 and graphically illustrate the results.The USPS charged $0.50 per stamp in 2021 and allows stamps.com to sell a sheet of twenty $0.50 stamps with personalized photos for $1.20 per stamp. Stamps.com keeps the extra beyond the $0.50 it pays the USPS. If stamps.com is acting as a profit-maximizing monopolist, what is their Lerner Index, and what is the price elasticity of demand for a customized stamp?
