Price (Dollars per Garment) 7 D E 5 AC=MC Demand Marginal Revenue 10 20 Garments cleaned per year (millions) The long run average and marginal cost of dry-cleaning services is $5, as shown in the graph. Given the demand curve and the marginal revenue curve shown in the graph, which of the following is true? Select one: If the industry were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $7 per garment. Ob. If the industry were perfectly competitive, 10 million garments would be cleaned each year. If the market were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $5 per garment and monopoly economic profit ould be zero. O d. If the industry were perfectly competitive then the long-run equilibrium price of dry-cleaning services would be $7 per garment.

Price (Dollars per Garment) 7 D E 5 AC=MC Demand Marginal Revenue 10 20 Garments cleaned per year (millions) The long run average and marginal cost of dry-cleaning services is $5, as shown in the graph. Given the demand curve and the marginal revenue curve shown in the graph, which of the following is true? Select one: If the industry were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $7 per garment. Ob. If the industry were perfectly competitive, 10 million garments would be cleaned each year. If the market were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $5 per garment and monopoly economic profit ould be zero. O d. If the industry were perfectly competitive then the long-run equilibrium price of dry-cleaning services would be $7 per garment.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

Consider the daily demand for pizza at a local Italian restaurant, provided in the table below. The nurmber of pizzas demanded at various prices in the table is also illustrated in the graph to the right. First, calculate the marginal revenue for selling pizza in the table. (Enter numeric responses using integers.) Quantity Price Total Revenue Marginal Revenue $19 1 18 18 17 34 3 16 48 15 60 14 70 13 78 Use the line drawing tool to graph the marginal revenue curve in the figure. Properly label this line. Carefully follow the instructions above, and only draw the required objects. 20- 18- 16 14- 12- 10 Quantity of Pizzas Price (dollars per pizza) 2.
Blue INK is the only cabel service provider in Gazipur. The diagram below depicts the price, output and costs incurred by Blue INK. Use the graph to answer the following questions: 1. What is the Total revenue generated by Blue INK at the profit maximizing level of output? 2. If the Cable Service Market turns into a Perfectly Competitive Market, what will be the total ammount of the service provided? 3. If the market turns into a Monopoly market again, what will be the total deadweight loss created?
13. You just got a patent for the first commercial self-driving car. The following table shows the elasticity of the demand and the marginal cost of production of your cars in several production centers across the globe. Assuming that this are constant, can you approximate what would be the optimal price for your cars? City Marginal Cost Elasticity Price Wolfburg, Germany Barcelona, Spain Tokyo, Japan Ulsan, South Korea East London, South Africa Mexico City, Mexico $20, 000 $18, 000 $22, 000 $16, 000 $10, 000 $12, 000 -1.5 $60, 000.00 $24, 000.00 $33, 000.00 $32, 000.00 $11, 428.60 $14, 400.00 -4.0 -3.0 -2.0 -8.0 -6.0
A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $30 per book.d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economicefficiency. What price would it charge for the book? How much profit would it make at thisprice? (
The graph below shows the Market conditions of Honey’s Laundry service, which is the only laundry in Arizon Residential Area. Considering the shop as a Monopoly market, answer the following questions: (a)In order to maximize profit, how many clothes does the shop clean?[Answer in numerical value only without any unit] (b)If the opening of five new laundries turns it into a perfectly competitive market, what should be the price Sunny’s laundry be charging now?[Answer in numerical value only without any unit] (c)Compute the change in total revenue between part a and part b.[Answer in numerical value only without any unit] Note: Bartleby does not accept more than 3 sub-parts, and here are no more than 3. Please solve all parts to get a 'like'. Thanks
Suppose that Comcast has a cable monopoly in Philadelphia. The following table gives Comcast's demand and costs per month for subscriptions to basic cable (for simplicity, we keep the number of subscribers artificially small). Price 51 48 45 42 Quantity 3 4 5 6 7 8 Total Revenue 153 192 225 252 273 288 Marginal Revenue A. Comcast should produce 6 units in the short run and shut down in the long run. O B. Comcast should shut down in the short run and produce 6 units in the long run. C. Comcast should shut down in the short run and in the long run. O D. Comcast should produce 6 units in the short run and in the long run. O E. None of the above. 39 33 27 21 15 Total Cost 108 129 153 180 210 243 Marginal Cost - 21 24 27 30 33 39 36 Suppose the local government imposes a $73 per month tax on cable companies. What will Comcast do? (Assume fixed costs equal $45.) Suppose that the flat per-month tax is replaced with a tax on the firm of $12 per cable subscriber. (Assume that Comcast will sell…
The following figure shows the demand curve for Good X in a perfectly competitive market. Later, the government grants one of the firms the exclusive right to manufacture and sell Good X. MR represents the marginal revenue curve of the firm when it operates as a monopoly. The marginal cost of producing Good X is constant at $5. Price/Cost (S) 4 Demand 3 MR 2 1 10 11 12 13 14 15 16 17 18 Quantity (1,000 units) a) What is the quantity supplied when the market is perfectly competitive? What happens to the quantity supplied once the market changes to a monopoly? b) What is the market price when the market is perfectly competitive? What is the market price when the market changes to a monopoly? c) Compare the consumer surplus when the market is perfectly competitive and when the market is a monopoly. Is there any producer surplus or deadweight loss in either case? If yes, then how much?
Igor’s Christmas tree lot has a monopoly on sales of Christmas trees. To increase his sales from 100 trees to 101 trees, he must drop the price of all his trees from $28 to $27. What is Igor’s marginal revenue when he lowers his price and increases his sales from 100 to 101 trees?
ssume there is no price discrimination: Matthew, Rachel, Janice, and Mandy own the only ice company in town (they have a monopoly on the ice market). Matthew wants to sell as much ice as possible without losing money. Rachel wants the ice company to bring in as much revenue as possible. Janice wants to maximize total surplus and Many wants to make the largest possible profit. Use ONE clearly-labelled graph of the ice company’s marginal revenue, demand, and cost curves to show the price and quantity (i.e., ice) each person desires. Provide explanation.
Why does a monopoly arise? O because of diseconomies of scale because entry to an industry is blocked because of elastic demand because firms want to maximize profits
2. The Ice Cream Lovers Society decided to open up an ice cream stand during the summermonths. They calculated that it would cost them $0.80 to make a scoop of ice cream and$350 a month to operate the stand. They hired a research team who determined that theprice-demand function given in dollars isp x x ( ) = −8 0.02wherexis the number ofscoops sold.a. Find the revenue functionR x( )b. Find the value ofxthat produces the maximum revenue algebraically.c. Find the maximum revenue algebraically.d. Find the price per scoop of ice cream that produces the maximum revenuealgebraically.e. Find the cost functionC x( )that describes the monthly costs of operating the icecream stand.f. Find the break-even points to the nearest scoop algebraically usingR x( )andC x( ) .g. Find the profit functionP x( ).
Determine the profit maximization point of a firm in a graph showing the dynamics of the Production and Cost Function. Supoose you are given this data of a monopolist. The price of the product is 35 pesos. 1. Compute for the- total cost, Average variable cost, marginal cost, total revenue, marginal revenue.2. Graph the schedule and answer the following question. - did the firm able to maximize its profit? If yes identify at what level (Quantity/output) or highlight the profit maximization point in the graph. If no, cite the reason why the firm was not able to maximize profit. Elaborate you explanation through you analysis on the Dynamics of the cost and output.