A monopolist is chooses their price (and the associated quantity implied by their demand curve) such that the price elasticity demand could be either -0.5 or -1.2. Which of the following statements are true: O -0.5 could be profit maximising, but -1.2 could not be profit maximising O Neither price-elasticities of demand could be profit maximising O Both price elasticies of demand could be profit maximising O 1.2 could be profit maximising, but -0.5 could not be profit maximising

A monopolist is chooses their price (and the associated quantity implied by their demand curve) such that the price elasticity demand could be either -0.5 or -1.2. Which of the following statements are true: O -0.5 could be profit maximising, but -1.2 could not be profit maximising O Neither price-elasticities of demand could be profit maximising O Both price elasticies of demand could be profit maximising O 1.2 could be profit maximising, but -0.5 could not be profit maximising

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If we require a monopolist to stop practicing ordinary price discriminationacross two markets, one of two things will happen: the monopolist will cease pricing on the inelastic portion of each demand curve in thetwo markets to price on the O a. elastic portion, or shut-down. O b. the monopolist will reduce sales in the inelastic market and increase them in the elastiC market, or stop selling in the inelastic market altogether. Oc the monopolist will begin making it possible for consumers to arbitrage across the two markets, or shut-down. O d. the monopolist will stop selling in the more elastic market or begin charging a price inboth markets which is a weighted average of the previous discriminatory prices.
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Consider a monopoly using a two part tariff against consumers with downward sloping individual demand: (i) The monopolist will produce the efficient output. (ii) The monopolist will extract all surplus from consumers. O a. (ii) Holds only for homogeneous consumers, but (i) holds with hetrogeneous consumers as well. O b. Even with homogeneous consumers, the monopolist will not always be able to assure that both (i) and (ii) hold. O c. (i) and (ii) are true only when consumers are homogenous. O d. (i) holds only for homogenous consumers, but (ii) holds with hetrogeneous consumers as well.
A monopolist has constant marginal cost equal to 30 and faces a market demand curve given by the following p= 100-2Q. If the monopolist is a perfect price discriminating monopolist its level of profit will be equal to (assume there is no fixed cost): O 1225. O 2450. O2275. O 1150. auto.proctoru.com is sharing your screen. Stop sharing Hide Next • Previous UN 18 SAP
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The figure below shows the cost and revenue curves faced by a monopolist. The profit-maximizing output and price for the monopolist are: Figure 9.1 $/Q $30 24 222 420 22 20 10 0 50 100 150 117 MC ATC MR 200 AVC O 117 units and $14, respectively. O 150 units and $22, respectively. O 150 units and $14, respectively. O 117 units and $22, respectively. O 117 units and $24, respectively. D Q
Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $30 $0 90 $30 20 80 $30 48 70 $30 78 60 4 $30 110 50 5 $30 150 Refer to Exhibit 9-4. At an output level of 5 units, the monopolist earns a total profits of about O S70.00 S82.00 O $100.00 O $102.00
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Price and cost (dollars per unit) 50.00 40.00 S=MC 30.00 20.00- 10.00. MR D. 100 200 300 400 500 Quantity (units per hour) In the above figure, a monopoly should charge $ for its output when maximizing profit. O $10 $20 $30 $40 O $50
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The monopolist has constant marginal and average cost AC-MC=70 and faces the market demand P120-Q. Suppose the monopolist can perfectly price discriminate by setting a two-part tariff: that is, the monopolist charges the consumer a fixed fee Fand a per unit price p. What are the optimal values of Fand p that the monopolist sets? O F-$2500, p-$70 O F-$3500, p-$70 O F-$2375, p-$95 O F-$1250, p-$70 O F-$2975, p-$85