ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- The accompanying graph depicts a hypothetical monopoly. Follow instuctions 1-3 below to identify the monopoly's profits 1. Place point E at the monopoly's profit maximizing price and quantity 2. Move the average total cost (ATC) curve to a position that depicts the monopoly earning a positive profit. 3. Place the area labeled Profit in the area of the graph that represents the monopoly's profit 10 MC Profit 7 ATC 4. 3 2 1 MR 0 4. 1 3 7 Quantity (millions of units) 10 LO et LO Price (S per unit)arrow_forwardEconomics Explain why a monopoly producer of shoes will not vertically integrate with perfect competitive distributors, and why a monopoly producer will vertically integrate with a monopoly distributor. Draw the appropriate graphs to explain these cases.arrow_forwardRaphael’s hair salon is a monopoly in a small town and is currently earning an economic profit. Draw a correctly labeled graph for Raphael and include the curves that are necessary to identify the following. The profit-maximizing price and quantity of haircuts, labeled Pm and Qm The area representing economic profits, shaded completely Does Raphael’s hair salon produce the allocatively efficient quantity? Explain. Assume that Raphael signs a new lease with an increase in rent, a fixed cost. Will the price of haircuts provided by Raphael increase, decrease, or stay the same in the short run? Explain. Assume that new hair salons enter the market and that the market becomes monopolistically competitive. Answer each of the following. The entry of new hair salons creates close substitutes for each individual salon’s services. As a result, will the demand for Raphael’s hair salon become more elastic or become less elastic, or will there be no change in the elasticity? Will…arrow_forward
- Sub : EconomicsPls answer very faast.I ll upvote. Thank Youarrow_forward↑ Price Price Panel B NECK D Quantity Panel A Price D Panel C D Use the figure above. Which of the following statements is correct? All the answers are correct. Price Panel B represents the typical demand curve for a perfectly competitive firm. Panel A represents the typical demand curve for a monopoly. Panel D. ⒸPanel A represents the typical demand curve for a perfectly competitive market. Darrow_forwardA market structure that is “monopoly” is NOT ... Group of answer choices a. production efficient b. allocation efficient c. neither allocation nor production efficientarrow_forward
- Use the cost and revenue data to answer the questions. Quantity Price Total Revenue Total Cost 10 90 15 80 20 70 25 60 30 50 35 40 900 1200 1400 1500 1500 1400 675 825 1025 1250 1500 1850 What is marginal revenue when quantity is 25? What is marginal cost when quantity is 15? If this firm is a monopoly, at what quantity will profit be maximized? If this is a perfectly competitive market, which quantity will be produced? $ 20 $ 90 Incorrect quantity: 6 Incorrect quantity: 8 Incorrectarrow_forwardPrice Panel B D KEL Quantity Price Price Panel A D Quantity Panel D D Quantity Price Panel C All the answers are correct. D Quantity Use the figure above. Which of the following statements is correct? O Panel B represents the typical demand curve for a perfectly competitive firm. O Panel A represents the typical demand curve for a perfectly competitive market. O Panel A represents the typical demand curve for a monopoly.arrow_forwardDraw the graph. If the monopoly is a doing perfect price discrimination, then: 1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.arrow_forward
- What is the difference between a monopoly's marginal revenue curve and a perfect competitor's marginal revenue curve? Please explain the difference in these markets by drawing the graphs.arrow_forwardHelp me pleasearrow_forwardThe figure below shows demand, marginal revenue, and short-run cost curves for a monopoly: a. How much should the firm produce? What price should it charge? b. What is the firm’s profit (loss)? Should this firm produce or shut down? Explain. c. If the firm shuts down in the short run, how much will it lose?arrow_forward
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