Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 16, Problem 2MCQ
To determine
Among the given options, identify the correct one on the basis of below statement:
A
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
One difference between a competitive firm and a monopoly is that __________________.
a. monopoly makes economic profits, but a competitive firm never makes economic profits
b. a monopoly faces a downward sloping marginal revenue curve, whereas a competitive firm faces a horizontal marginal revenue curve
c. the cost curves of a monopoly are always below those of a competitive firm
d. a monopoly always has economies of scale, but a competitive firm always has diseconomies of scale
What is the dead weight loss?
a.The loss in welfare due to the monopoly producing a LARGER amount than a competitive market would
b. None of the other answers is correct
c.A new weight loss system
d.The loss in welfare due to the monopoly producing a SMALLER amount than a competitive market would
2
A monopoly sells its goods in the United States, where the elasticity of demand is -2, and in Japan, where the elasticity of demand is -5. Its marginal cost is $10. At what price does the monopoly sell its goods in each country if resale is impossible?
Chapter 16 Solutions
Foundations of Economics (8th Edition)
Ch. 16 - Prob. 1SPPACh. 16 - Prob. 2SPPACh. 16 - Prob. 3SPPACh. 16 - Prob. 4SPPACh. 16 - Prob. 5SPPACh. 16 - Prob. 6SPPACh. 16 - Prob. 7SPPACh. 16 - Prob. 8SPPACh. 16 - Prob. 9SPPACh. 16 - Prob. 10SPPA
Ch. 16 - Prob. 11SPPACh. 16 - Prob. 1IAPACh. 16 - Prob. 2IAPACh. 16 - Prob. 3IAPACh. 16 - Prob. 4IAPACh. 16 - Prob. 5IAPACh. 16 - Prob. 6IAPACh. 16 - Prob. 7IAPACh. 16 - Prob. 8IAPACh. 16 - Prob. 9IAPACh. 16 - Prob. 10IAPACh. 16 - Prob. 1MCQCh. 16 - Prob. 2MCQCh. 16 - Prob. 3MCQCh. 16 - Prob. 4MCQCh. 16 - Prob. 5MCQCh. 16 - Prob. 6MCQCh. 16 - Prob. 7MCQ
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
- Plz do the both questions. Which of the following statements is true about a monopoly?O.A. there are no barriers to entryO.B. they earn positive economic profits in the short run onlyO.C. they produce a good that has close substitutesO.D. none of the abovearrow_forwardQUESTION 7 Ted is an architect who has a very unique style of designing buildings. Ted's style is so unique that other architects cannot replicate his work. Therefore, Ted can operate as a monopoly. Assume demand for Ted's work is linear and that he aims to maximise profits. Which of the following statements are true: The price Ted can charge is determined by the demand for his work. O Average total cost and the demand curve can be used to help calculate the profit from selling the profit maximising number of designs. Ted is a price taker. Ted's profit-maximising quantity will be determined by finding where his marginal revenue equals his marginal cost.arrow_forwardConsider a monopoly firm producing laptops. Below are the equations describing this firm's economic conditions. Demand: Q = 10 – P Marginal Revenue: MR= 10 – 2Q Total Cost: TC = 4 + Q + 0.5Q² || Marginal Cost: MC=1+Q Choose all correct statements. The produced quantity is 3. В. The price charged is 6. n C. The profit this monopoly firm can make is 9.5. D. None of above is correct.arrow_forward
- Which of the following statements is true about a monopoly A. there are no barriers to entry B. they earn economic profit only in the short run C. They produce a good with many close substitutes D. None of the abovearrow_forwardQuestion 38 An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will OA. raise its price and move to the segment of the demand line where PED exceeds 1 in absolute value. B. raise its price, increase its output, and move the segment of the demand line above the point where PED equals 1. OC. lower its price, increase its output, and shift to the segment of the demand line where PED exceeds 1 in absolute value. O D.continue to produce this level of output because any change will lower its profit.arrow_forwardQuestion 1: Revenue and costs MC $34 ATC 29 50 27 21 13 Demand MR 600 800 940 1160 Quantity Assume this is a monopoly. What is the market equilibrium output in this market? Question 2: Revenue and costs MC $34 ATC 29.50 27 21 13 Demand MR 600 800 940 1160 Quantity Assume the above graph is a monopoly. What is the deadweight loss if this firm maximizes profits? If there is no deadweight loss, put 0 in for your answer. Assume linearity.arrow_forward
- 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?arrow_forwardWhat are examples of ways in which a firm can have a monopoly? A. Patents B. Natural Monopoly C. Trademarks D. A and B E. A, B, and Carrow_forwardWhile firms in perfect competition maximize profit by producing at a quantity where the marginal cost of producing another unit of a good is equal the the marginal revenue from producing another unit, monopoly firms will maximize profit by producing at a quantity where marginal cost of producing another unit is equal to O the marginal profit O the average total cost the price of the good the marginal revenue (the same as perfect competition)arrow_forward
- What is the deadweight loss associated with monopoly? A. The loss in consumer surplus due to high prices and reduced output B. The loss in producer surplus due to low prices and excess supply C. The loss in government revenue due to taxation D. The loss in economic efficiency due to government interventionarrow_forwardThe graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow. "image" i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.arrow_forwardA natural monopoly is a monopoly that arises because one firm can meet the entire market demand at a lower average _____ cost than two or more firms could. A legal monopoly is a market in which _____ by the granting of a public franchise, government licence, patent, or copyright. A. fixed; competition and entry are restricted B. total; competition and entry are restricted C. variable; profts are maximized D. variable; costs are minimizedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning