If it were costless to switch providers, O A. more providers would enter the industry and the price would fall. The fall in price would decrease demand for smartphones. Washington would not need to interfere B. providers would be even more diligent at maintaining the same high price, and Washington would be forced to police the industry to ensure that antitrust laws are not broken OC. consumers would switch to the provider with the lowest price, the market would become competitive, and there would be no role for Washington O D. consumers would switch to the provider with the lowest price, a price war would break out, and most firms would go bankrupt and leave the industry. The remaining firms would form another cartel and raise the price back to the monopoly level. Washington would be required to implement new regulations

If it were costless to switch providers, O A. more providers would enter the industry and the price would fall. The fall in price would decrease demand for smartphones. Washington would not need to interfere B. providers would be even more diligent at maintaining the same high price, and Washington would be forced to police the industry to ensure that antitrust laws are not broken OC. consumers would switch to the provider with the lowest price, the market would become competitive, and there would be no role for Washington O D. consumers would switch to the provider with the lowest price, a price war would break out, and most firms would go bankrupt and leave the industry. The remaining firms would form another cartel and raise the price back to the monopoly level. Washington would be required to implement new regulations

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

E2
Gouge-em Cable Company is the only cable television servicecompany licensed to operate in Backwater County. Most of itscosts are access fees and maintenance expenses. These fixed costs total $640,000 monthly. The marginal cost of addinganother subscriber to its system is constant at $2 per month.Gouge-em’s demand curve can be determined from the datain the accompanying table. a. What price will Gouge-em charge for its cable services?What are its profits at this price?b. Now suppose the Backwater County Public UtilityCommission has the data and believes that cablesubscription rates in the county are too expensive and thatGouge-em’s profits are unfairly high. What regulated pricewill it set so that Gouge-em makes only a normal rate ofreturn on its investment?
Table 15-9 Consider the following demand and cost information for a monopoly. Quantity Total Cost $6 $20 $34 $48 $62 $76 10 1 2 3 14 QUESTION 30 15 Refer to Table 15-9. What is the marginal revenue of the 3rd unit? O a. $20 b. $28 O c. $4 O d. $12 Price $32 $28 $24 $20 $16 $12 QUESTION 31 The fundamental source of monopoly power is O a. rising average total costs. O b. low fixed costs. O c. barriers to entry. O d. many buyers and sellers.
. Until recently, the drug maker Pfizer enjoyed a monopoly of the cholesterol-control drug Lipitor because of patents rights. True or false
Movir Question 10 Suppose that De Beers and the local water utility are both monopolists, in the markets for diamond jewelry and water. If both monopolies decided to raise prices 5 percent, which monopoly would be more likely to see its total revenue decrease?" Why? For the
Movir Question 10 Suppose that De Beers and the local water utility are both monopolists, in the markets for diamond jewelry and water. If both monopolies decided to raise prices 5 percent, which monopoly would be more likely to see its total revenue decrease?" Why? For the
Exhibit 9-4: A Monopoly Total Quantity Total Fixed Variable Price Demanded Cost Cost $100 $20 $0 ts 90 1 $20 20 80 $20 48 70 $20 78 ments 60 4 $20 110 50 $20 150 Refer to Exhibit 9-4. At an output level of 4 units, the monopolist earns a total profits of about Tutoring $112.00 shboard $118.00 $110.00 O $120.00 erts
What is the "generic competition paradox"? Select one: O a. When the patent has expired and pricing is free, prescription tends to move towards innovative drugs with a patent. O b. It is a price discrimination mechanism observed in the United States when the patent has expired and pricing is free. O c. It is a price discrimination mechanism observed mainly in Europe when the patent has expired and pricing is free. O d. When the patent has expired and pricing is free, the price of generics falls to the marginal cost, so the revenues of the innovative firms are not sufficient to cover R&D costs of the drug whose patent has expired.
47 and 48
PRICE (Dollars per subscription) 100 90 80 70 60 50 40 30 20 10 0 0 2 4 Pricing Mechanism Profit Maximization " 6 10 12 14 QUANTITY (Thousands of subscriptions) Marginal-Cost Pricing Average-Cost Pricing T 8 Complete the first row of the following table. MR O True O False Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. 16 Complete the second row of the previous table. ATC MC Complete the third row of the previous table. D 18 20 Short Run Price Quantity (Subscriptions) (Dollars per subscription) Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Profit Suppose now that the government decides to require the monopolist to set its price equal to average total cost. Long-Run Decision True or False: Over time, the internet service provider has a very strong incentive to lower costs when subject to average-cost pricing regulations.
Assume that you are a loyal customer from Lanuit Coffee and you always buy Americano coffee from Lanuit Coffee with the price USD 10, but then you look the Toast n Bread store bundling package that consists of the various coffee brand: Happy Coffee with Toast n Bread package USD 20. Which one will you choose? Will you still buy coffee from Lanuit Coffee? And as a loyal customer, which one more elastic, Lanuit Coffee or Happy Coffee for you? If you as the management of Lanuit Coffee, what will you do to keep the loyal customer, and how about your opinion with the elasticity of demand in Lanuit Coffee products? Please explain your answer.
The following graph shows the demands and marginal revenue in two markets, 1 and 2, for a price discriminating firm along with total marginal revenue, MRT, and marginal cost. Price and cost (dollars) 50 40 30 20 10 0 50 Multiple Choice O 100 150 What price should the firm charge in each market? P₁ = $20, P₂ = $32.50 P₁ = $35. P₂- $22.50 = P₁ = $20, P2 = $20 200 P₁ = $27.50, P₂ = $35 MR2 250 Quantity MC 300 D₁ L 350 Impossible to say because market demand is not given. MRT 400 450 D₂ 500 Q