There are 1000 competitive firms of the size represented by AC1, and AC2 represents the only firm if there were a monopoly. In the figure below, how much less does an unregulated monopoly produce compared to a perfectly competitive industry?

There are 1000 competitive firms of the size represented by AC1, and AC2 represents the only firm if there were a monopoly. In the figure below, how much less does an unregulated monopoly produce compared to a perfectly competitive industry?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Use it to answer the questions that follow Output Price Total Cost 0 $100 $200 1 100 290 2 100 350…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: tions of Honey’s Laundry service, which is the only laundry in Banani Residential Area. Considering…

A: With market as monopoly, the firm will maximize profits and produce at a point where MR = MC.

Q: How a profit-maximizing monopoly chooses output and price. Explain with examples.

A: Market structure is the division of markets based on the level of competition. There are four major…

Q: demand curve, marginal revenue, and marginal cost curves for a monopoly and indicate the quantity of…

A: A monopolist is a person who is a single-seller selling differentiated goods. He is the price(P)…

Q: We have learned the definition of monopoly as a market with one seller. Let's take some time to…

A: The market is a location where the transaction of services and commodities takes place. It is…

Q: Please compare the difference in market equilibrium and its consequence between monopoly and market…

A: Monopoly is the state of the market when there is only a single seller of the product and there are…

Q: Why does the marginal revenue of a monopoly firm decrease with the increase in quantity of output…

A: The monopoly is a firm which has a single seller and many buyers in the market. The monopoly market…

Q: Why does monopoly arise? How does monopoly make profit and loss? Graphically explain

A: Monopoly can arise by the following : Monopoly can arise, given that there is only one business…

Q: Why might a firm have monopoly power even if it is not the only producer in the market?

A: The ability of a company to set the Price of a product is known as market power. Monopoly power is…

Q: What quantity would be produced if the monopoly becomes a perfectly competitive industry according…

A: In perfect competition, any profit-maximizing producer faces a market price equal to its marginal…

Q: Under what condition is a monopoly preferred to perfect competition? Use a diagram to explain your…

A: Under perfect competition, there are large number of buyers and selling selling homogeneous goods.…

Q: 4. e) A student in a managerial economics class calculated the four-firm concentration ratio and HHI…

A: 4. (a) Does either industry have one firm only (monopoly)? Please explain using the information in…

Q: explain what happens to a monopoly firm operating in the long-run.

A: A monopoly is a single seller that has control over the market supply. This implies monopoly is a…

Q: What are the basic differences between governmental monopoly and market monopoly? Briefly discuss…

A: A monopoly market structure only has one seller selling a unique product. As being the sole seller,…

Q: The following diagram provides demand and cost curves for a product supplied by a natural monopoly.…

A: Natural monopolies are the firms that control the industry in the absence of rivals. In other words,…

Q: The government is contemplating regulating the monopoly and forcing it to operate at the competitive…

A: In a monopoly market structure, A monopolist will produce where the marginal revenue is equal to…

Q: Sara is a single-price, profit-maximizing monopolist who sells her own patented perfume (shown in…

A: A monopoly firm will produce at the intersection of MR and MC curves to maximize the profit. A…

Q: Juan's demand for ice cream from the Ice Cream Monopoly Company is illustrated in the figure below.…

Q: What is a monopoly and why does it differ from perfect competition? discuss an example of monopoly,…

A: The monopoly refers to the market where only single firm exists in the market. The single firm has…

Q: a. If the firm wishes to maximize its total revenue, at what price should it sell its pots? 12 x…

A: Elasticity measures the percentage change in quantity due to percentage change in price. The price…

Q: Sacramento Gas and Electric is a firm that represents a natural monopoly. Assume that there will be…

A: Since , it is given that there is natural monopoly enjoyed by the Sacramento Gas and Electric firm.…

Q: One of the sources of Monopoly market power is their Economies of Scale. What will happen when…

A: When there is economies of scale in monopoly market,monopoly firms can expand their business on a…

Q: Which of these firms has a monopoly (where "monopoly" is defined by economists)? Google, owner of…

A: A monopoly, as defined by economists, refers to a market structure where there is only one seller…

Q: If a monopoly firm is earning profits, how much would you expect these profits to be diminished by…

A: Monopoly is said to exist when one firm is the sole producer or seller of a product which has no…

Q: Using a simple diagram, illustrate how the monopolist can produce output of a competitive firm but…

A: Monopolist refers to the type of economy or market where it is characterized by a single seller or…

Q: why can a monopoly earn economic profits in the long run?

A: A circumstance where the seller can make more than usual earnings is known as a supernormal profit.…

Q: What do you understand by discriminatory monopoly? Bring out the conditions that enables the…

A: Monopoly is the type of market structure where there exist a single seller and many buyers and the…

Q: If you were managing a monopoly, and small entrant tried to enter your market, explain why it might…

A: We show that monopoly is a type of màrket characterized by a single seller selling different…

Q: What are the arguments for and against such a monopoly? Illustrate your answer with a diagram.

A: A market structure known as a monopoly occurs when there is only one supplier or vendor of a certain…

Q: What are the economic benefits of perfect competition compared to a monopoly?

A: When we talk about a perfect competitive market structure, we're talking about a market system where…

Q: Compare and contrast the decision-making processes of a competitive firm versus a monopoly firm.

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: Which of the following situations would likely result in the formation of a natural monopoly?…

A: The objective of the question is to identify the situations that would likely result in the…

Q: Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit,…

A: Given A monopoly sells 250 units at price $60 per unit. At the 250th unit, MR=40, MC=50, ATC=60 We…

Q: Consider the following firms. Would you regard any of them as a monopoly? Why or why not? Could you…

A: Monopoly is defined as a market structure where there is only a single seller of a product that has…

Q: Explain how you know when a monopoly firm should shut down and describe how the graph looks.

A: Monopoly is a form of imperfect competition. There is one firm. The number of consumers is high.…

Q: 'Because a monopoly is the only source of supply, the firm is not constrained by the market demand…

A: The monopoly market is characterised by the single seller and many buyers while there are many firms…

Q: Use the following graph to answer the next question. $50 MC $45 ATC $40 $35 $20 D MR 10 20 25 40…

A: We are going to analyze profit maximizing conditions for pure monopoly to answer this question.

Q: What is a monopoly? What are the benefits and costs of monopoly?

A: Answer: (1). Monopoly: monopoly refers to the market structure where there is a single seller and a…

Q: Identify the primary difference between a purely competition and a monopoly market

A: Market structure is a term used in economics to describe how different industries are classified and…

Q: The following graph depicts the demand (D), marginal revenue (MR), marginal cost (MC), and average…

A: A natural monopoly is a type of monopoly that arises in certain industries due to inherent…

Concept explainers

Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.

Question

There are 1000 competitive firms of the size
represented by AC1, and AC2 represents the
only firm if there were a monopoly. In the
figure below, how much less does an
unregulated monopoly produce compared to
a perfectly competitive industry?
Price
$70
$60
$50
$40
A
B
C
D
Same
20b fewer units
30b fewer units
40b fewer units
X 50b fewer units
MC, AC,
Qi-50m
MC,
AC
AC
-MC
Quantity
Price
MR
Your answer
MC
JAC
D
30b 40b 50b 60b Quantity

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: State the condition of optimal output for perfectly competitive and monopoly firm.

VIEW

Step 2: Explain the answer:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Explain fully why perfectly competitive firms and monopolies maximize profits by choosing the quantity where MR = MC. Explain why the profit maximizing price of the monopoly can be higher or lower than the profit maximizing price for perfect competition.
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?
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
A patent gave Sony a legal monopoly to produce a robot dog called Aibo. The Chihuahua-size pooch robot can sit, chase balls, dance, and play an electronic tune. When Sony started selling the toy in July 1999, it announced that it would sell 3,000 Aibo robots in Japan for about $2,000 each and a limited litter of in the United States for $2,500 each. Suppose that Sony's marginal cost of producing Aibos is $500.Its inverse demand curve is Pj= 3500−0.5Qj in Japan and Pa =4500−Qa Solve for the equilibrium prices and quantities (assuming that U.S. customers cannot buy robots from Japan). The equilibrium quantity in Japan is ____and the price, Pj is $____
From a societal point of view, can we claim that perfect competition and monopoly are equally efficient? Why, or why not? Explain.give graph if needed
solve correctly. I will rate accordingly.
Compare the efficiency of monopoly and perfect competition firms on the same graph by considering their output level and price level. explain.
12. You’ve been hired as a consultant by a monopoly. You discover that the demand curve facing the monopoly is given by P = 80-Q and MC = 3Q. The firm is currently charging a price of $60. Using this information and a carefully drawn and labeled diagram and assuming that the firm should remain open, explain what the firm should do and why.
Describe two different fundamental ways that a firm can try to move towards being a monopoly
Natural monopoly is inefficient as it charges a price higher than marginal cost. Is it feasible for the government to regulate the monopoly by setting a price equal to marginal cost? Explain with a diagram.
Provide an example of a cost function for which a natural monopoly exists. Why might we want to allow natural monopolies to exist (e.g. how might social welfare benefit from such a monopoly)?
Answer the following 2 questions a) Can a firm have market power even if it is not the only firm in the market? Why? How do you measure market power? b) Is there a social cost associated with profit maximisation in monopoly? Why? Please illustrate your reply with a graph