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Name three characteristics of a monopoly firm.

Name three characteristics of a monopoly firm.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Name three characteristics of a monopoly firm. 2) Give an example of a business that is considered a monopoly. 3) How does a monopoly firm (or any business) decide the quantity that should be produced to maximize profit? In other words, what rule do they follow? 4) 1) Draw the monopoly cost curves where the firm is making a profit. Shade in the area of profit. 5) If the monopoly firm is making a profit will other firms join the market (like they did in perfect competition) and eliminate the profits of the monopoly? Why or why not? 6) Draw the monopoly curves where the firm is losing money. Shade in the area of loss. 7) If a firm in any market structure is losing money what will they do in the long-run? 8) How is the price and quantity that a monopoly produces different than the price and quantity that is produced in perfect competition? 9) Draw the cost curves of a monopoly where the business would immediately (short-run) shut-down. 10) Draw the cost curves for a monopoly and show the area of consumer surplus, producer surplus and deadweight ls.
Transcribed Image Text:Name three characteristics of a monopoly firm. 2) Give an example of a business that is considered a monopoly. 3) How does a monopoly firm (or any business) decide the quantity that should be produced to maximize profit? In other words, what rule do they follow? 4) 1) Draw the monopoly cost curves where the firm is making a profit. Shade in the area of profit. 5) If the monopoly firm is making a profit will other firms join the market (like they did in perfect competition) and eliminate the profits of the monopoly? Why or why not? 6) Draw the monopoly curves where the firm is losing money. Shade in the area of loss. 7) If a firm in any market structure is losing money what will they do in the long-run? 8) How is the price and quantity that a monopoly produces different than the price and quantity that is produced in perfect competition? 9) Draw the cost curves of a monopoly where the business would immediately (short-run) shut-down. 10) Draw the cost curves for a monopoly and show the area of consumer surplus, producer surplus and deadweight ls.
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