Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 16, Problem 6MCQ
To determine
To find:
The correct option for a
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Draw the graph. If the monopoly is a doing perfect price discrimination, then:
1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.
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 intervention
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
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
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- What would the problem be if the government forced a natural monopoly to set a price equal to its marginal cost? a. the firm will make excessive profits b. consumers buy less of the good than is efficient c. consumers buy more of the good than is efficient d. the firm will make losses and exit the marketarrow_forwardWhen does a company officially become a monopoly? a. when it controls more than 25 percent of the output of a certain product b. when the government decides the company is a threat to the national economy c. when a company controls the output for a marketable product without meaningful competition d. when a company controls more than 50 percent of the output of a productarrow_forwardThe 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_forward
- 8 A monopoly has the following demand and Total Cost curve: Demand: P=1000-10Q TC=100Q+5Q2 1. How much profits does the monopoly make at the profit-maximizing level of quantity? $ 2. What is the DWL from the monopoly? $arrow_forwardA monopoly produces outcome and than the efficient deadweight loss. a. More, creates b. Less, creates c. Less, does not create d. More, does not createarrow_forwardFigure 15-8 Price A B с MR X Y Y Z MC D Quantity Refer to Figure 15-8. What is the monopoly price and quantity? a. price = B; quantity = Y b. price = C; quantity = X c. price = B; quantity = X d. price = A; quantity = Xarrow_forward
- A natural monopoly refers to a monopoly that is defended from direct competition by a. Control over a vital input b. A government franchise c. A patent or copyright d. Economies of scale over a broad range of outputarrow_forwardAndrew is a monopolist whose production process exhibits economies of scale. (a) Draw a diagram illustrating Andrew's profit-maximizing price and quantity. On your diagram, identify the deadweight loss of monopoly. (b) The government is concerned that Andrew is charging too high a price and plans to regulate the price. Hustrate the price regulation you would recommend on your diagram and explain your recommendation. (c) What is the maximum amount of money Andrew would be willing to spend lob- bying the government to avoid the price regulation you identified in (b)? 2.arrow_forwardReview the graph at right for a monopoly market (enter all of your responses as whole numbers). Price 100- 90- MC How much is the consumer surplus? $ 80 70- 160 60- 50- 40- 30 30- 20- 10- MR 40 50 60 Quantity 0- 80 90 tv 80 esc F1 F2 F3 F4 F5 F6 F7 FR 2$ % & 1 4 7 8 Q W E R T Y tab A S つ caps lock C V B ift fn control option command つ エarrow_forward
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