Question 33 (1 point)SavedFor the monopoly firm shown in Figure 16-3.2, what price would the monopolistcharge?$60$85$130$75

To determine the price that the monopolist would charge, we need to find the profit-maximizing…

Answered: Question 33 (1 point) Saved For the…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 14RQ: In what sense is a natural monopoly natural?

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Similar questions

Draw the demand curve, marginal revenue, and marginal cost curves from Figure 9.6, and identify the quantity of output the monopoly wishes to supply and the price it will charge. Suppose demand for the monopolys product increases dramatically. Draw the new demand me. What happens to the marginal revenue as a result of the increase in demand? What happens to the marginal cost curve? Identify the new profit-maximizing quantity and price. Does the answer make sense to you? Figure 9.6 Illustrating Profits at the HealthPill Monolpoly
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
In what sense is a natural monopoly natural?
What is the usual shape of a total revenue curve for a monopolist? Why?
How does the demand curve perceived by a monopolist compare with the market demand curve?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
7. Monopoly and Price Elasticity Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, total revenue would and total cost would Therefore, a monopolist will produce a quantity at which the demand curve is inelastic. Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). 10 Demand 9 8 Inelastic Demand 7 6 Max TR 3 2 1 -1 -2 Marginal Revenue -3 -4 -5 2 3 4 6 7 8 9 10 Quantity
6. Consider a monopolist with zero cost, C(Q)= 0, facing two consumers. Con- sumer 1's demand is given by P=8-Q while consumer 2's is P=8-Q. Sup- pose the monopolist can engage in second-degree price discrimination. (a) What menu of quantity-price pairs should it offer to its customers? What's the firm's profit? (b) Suppose that consumer 1's demand is instead given by P=4-1Q. What menu of quantity-price pairs should it offer to its customers? What's the firm's profit?
31) The figure shows demand and marginal revenue for a single price monopoly. $ A 14 12 10 6 2 0 D 500 1000 1500 2000 Q FIGURE 10-5 Refer to Figure 10-5. Assume production costs are constant and equal to $6.00 (i.e., AC = MC = $6.00). For this single-price monopoly, at the profit-maximizing (or loss minimizing) level of output, profit is A) $750. B) $1500. C) $2500. D) $3000. E) $4500.

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Question 33 (1 point) Saved For the monopoly firm shown in Figure 16-3.2, what price would the monopolist charge? $60 $85 $130 $75