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Consider the following options A to E. Each option relates to an individual firm operating under a certain market structure. OPTION Marginal Average Average cost 10 9 18 14 20 A B C D E cost 10 12 15 9 25 revenue 10 12 20 20 20 Marginal revenue 10 12 15 14 10 (1) Which option indicates a short run equilibrium output for a profit maximising monopolist? (ii)Write down ALL the options that indicate that a firm is making excess profits. 114 (iii) Write down ALL the options that indicate that the firm could expand its output and increase its profits? (iv) Write down ALL the options which could correspond to a firm operating in a perfectly competitive environment.

Question 4 $19 16 13 10 0 100 MC 160180 210 Quantity MR ATC D Assume all monopolistically competitive firms in an industry have demand and costs similar to the firm shown. What should we expect? O Firms will exit the business and the demand curve will shift to the left This firm will produce where MR-MC and no other firms will enter or exit Other firms will enter the industry and the demand curve will shift to the left

Table 2 Shows Media Cable’s demand table, total revenue, and marginal revenue at each price. Why, at any price lower than $130, is the marginal revenue from an additional sale less than the price? Table 2 Price Amount Demanded Total Revenue Marginal Revenue $160 0 $0 n/a $130 90 $11,700 $130.00 $100 200 $20,000 $75.45 $80 350 $28,000 $53.33 $40 600 $24,000 -$16.00 $0 850 $0 -$96.00 Question 1 options:   a)  Lowering the price means that Media Cable lowers the price on all cable packages sold, and the combination of the price effect and quantity effect work together to reduce the Marginal Revenue.   b)  Marginal revenue is calculated by dividing the change in quantity into the change in Total Revenue.   c)  The price effect tends to increase Total Revenue.   d)  The quantity effect tends to decrease Total Revenue.   e)  It cost less to provide a service in…

Q (units) 0 1 2 NMT 3 4 5 P ($) 50 45 40 35 30 25 TC ($) 10 $105 none of the above 26 42 58 74 90 If the monopolist maximizes profit, then profit will be O($44) O $47

T/F There are alot of  firms (seller) in a monopoly market. Justify in detail.

Question Completion Status: 360 370 Quantity Produced 0 1 2 QUESTION 5 3 4 45 D 5 60 380 390 400 410 420 5 16 C 7 8 b. $565 c. $1000 d. $435 Total Cost $100 $140 $184 $230 $280 $335 $395 $475 $575 8C Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. COSTS REVENUES Marginal Cost 0 1 2 3 4 5 90 440 Quantity Demanded 6 7 10 110 8 450 46 47 48 49 50 120 130 140 150 160 170 180 190 Price $170 $160 $150 $140 $130 $120 $110 $100 $95 20 Total Marginal Revenue Revenue 210 226 Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is total profit at the profit-maximizing quantity? a. $325 26

(J)  Pure monopolies are said to be allocatively inefficient because  price is equal to marginal cost.  price is greater than marginal cost.  price is less than marginal cost.  they produce whereMR>MC

ADJ Enterprises produces hydrothermocorticoids. The table below shows the costs of producing various quantities of hydrothermocorticoids.   Quantity Total Cost   Average Cost 0 $0 -- 1 $10 $10.00 2 $12 $6.00 3 $15 $5.00 4 $19 $4.75 5 $24 $4.80 6 $30 $5.00 7 $45 $6.43   ADJ sells its hydrothermocorticoids for $5 each (that is the price regardless of the number of hydrothermocorticoids it sells). Use the Profit-Maximizing Rule to explain the quantity that ADJ should produce to maximize its profits. You may use a calculator. You should explain the details of any calculation you perform. You should identify, explain, and apply the concept you use to answer this question. To receive full credit, your explanation must show all steps in any calculations you perform. Your explanation must also incorporate the profit-maximizing rule – state what that rule is and explain how it applies to ADJ’s situation. Note that it is…

What is the profit maximizing level of output for the monopoly firm represented above?     (a) 11     (b) 14     (c) 16     (d) 26