The following graph gives the demand (D) curve for water services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local water company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. ? PRICE (Dollars per hundred cubic feet) 40 36 32 28 24 20 16 12 co 4 0 0 1 2 True MR 3 4 5 7 8 QUANTITY (Hundreds of cubic feet) False ATC MC 9 10 D + Which of the following statements are true about this natural monopoly? Check all that apply. Monopoly Outcome The water company is experiencing economies of scale. The water company is experiencing diseconomies of scale. The water company must own a scarce resource. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. True or False: Without government regulation, natural monopolies can earn positive profit in the long run.

Suppose a monopolist is characterized as follows: P= 1200-5Q C = 8600 + 28Q+Q² MC 28 + 2Q demand curve for the monopolist total cost function for the monopolist marginal cost function for the monopolist To maximize its profit, the monopolist should produce units of output. (Enter your response rounded to two decimal places.) The company's profit-maximizing price is $ (Enter your response rounded to two decimal places.) The monopolist's profit is $ (Enter your response rounded to two decimal places.) Suppose the government imposes a specific tax of $150 per unit on the monopolist. To maximize profit, the monopolist should now produce units of output. (Enter your response rounded to two decimal places.) When the tax is imposed, the monopolist's profit-maximizing price becomes $ (Enter your response rounded to two decimal places.) As a result of the tax, the monopolist raises its price by

To answer this question, you will want to work out the answer using a graph on a piece of scratch paper (not turned in). You are going to compare the outcomes in the case where there is perfect competition to the monopoly case. So, as an intermediate step, you will need to compute the equilibrium outcomes under competition and monopoly. Suppose that you have the following information about the demand for oil. Price ($/barrel) 80 70 60 50 40 30 20 10 Suppose that the marginal cost to produce a barrel of oil is $20. What is the deadweight loss if the oil market is a monopoly? Quantity demanded(# barrels) 5 6 7 8 9 10 11 12

The graph above shows the cost and revenue curves for a natural monopoly that provides electrical power to the town of Fanaland. If unregulated, the monopolist operates to maximize its profit. (a) Identify the monopolist’s profit-maximizing quantity and price. (b) Assume the town government of Fanaland regulates the monopolist’s price to achieve the allocatively efficient quantity. What price would the government set in order to achieve the allocatively efficient quantity? (c) Will producing the allocatively efficient quantity be economically feasible for the monopolist? Explain. (d) Suppose instead the town government wants to regulate the monopolist to earn zero economic profit. What price would the government set to have the monopolist earn zero economic profit? (e) Based on your answer to part (d), will the deadweight loss increase, decrease, or stay the same as that of the unregulated monopolist? Explain.

Question 2: Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at a price of $700 per bicycle. In order to increase sales by one bicycle per month, the monopolist must lower the price of its bicycles by $100 to $600 per bicycle. What is the marginal revenue of the eleventh bicycle?

BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss.   Suppose that BYOB charges $2.50 per can. Your friend Charles says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. Complete the following table to determine whether Charles is…

Give typed explanation

d. Suppose the government imposes an average pricing rule, requiring the monopolist to set its price equal to the average total cost. Place the point labeled “Average cost pricing” at the appropriate coordinates to indicate the firm's price and quantity under this rule. Please place the Monoploy Pricing, Marginal Cost Pricing, and Average Cost Pricing on their appropriate places on the graph. Thank you!

What membership fee would maximize profit for the club? Compared to the profit of a similar but single-price monopoly golf club, how much more profit does Northlands Golf Club make?

You are the manager of a monopoly. Your analytics department estimates that a typical consumer’s inverse demand function for your firm’s product is P = 400 −20Q, and your cost function is C(Q) = 120Q.a. Determine the optimal two-part pricing strategy.  Per-unit fee: $   Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?