Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 16, Problem 8IAPA
To determine
To find:
The efficient level of price, quantity and
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K
Big Top is the only circus in the nation. The graph shows its demand curve and marginal cost curve.
Draw the marginal revenue curve Label it
Draw a point at the firm's profit-maximizing output and price
Draw a shape to show the consumer surplus Label it CS
Draw a shape to show the producer surplus Label it PS
S
Consumer surplus equals and producer
surplus equals s
>>> Answer to 2 decimal places
When the firm maximizes profit, the circus is
OA. efficient, marginal revenue equals marginal cost
OB. inefficient, marginal benefit exceeds marginal revenue
OC. efficient, the marginal benefit from an additional ticket is greater than its marginal cost
OD. inefficient, the marginal benefit from an additional ticket is greater than its marginal cost
OE. inefficient, marginal revenue equals marginal cost
because
1
50-
45-
40
35
30-
25
20-
15-
10-
5+
0+
0
Price and cost (dollars per ticket)
D
MC
100 200 300 400 500 600 700 800 900
Quantity (tickets per show)
>>> Draw only the objects specified…
Please submit the answer and then watch the video feedback.Farmer Ted sells 1,000 bushels of wheat at a price of $5 per bushel in a competitive market. Wilma sells 5 gallons of water at a price of $5 per gallon in a monopoly market. If both Farmer Ted and Wilma want to sell a higher quantity, what happens to their respective prices?
a.Farmer Ted's price remains constant and Wilma's price decreases.
b.Farmer Ted's price decreases and Wilma's price remains constant.
c.Farmer Ted's price remains constant and Wilma's price increases.
d.Both Farmer Ted's and Wilma's prices decrease.
a. Coca-Cola cuts its price below that of Pepsi-Cola to increase profit.
b. A Single firm, protected by a barrier to entry, produces a personal service that has no close substitutes
c. barrier to entry exists, but the good has some close substitutes
d. A museum offers discounts to students and seniors
e. A firm can sell any quantity it chooses at the going price
f. A firm experiences economics of scale even when it produces the quantity that meets the entire market demand.
1. Which of the six cases are monopolies or might give rise to monopoly?
2. which are legal monopolies and which are natural monopolies? can any of them price discriminate? if so, why?
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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- Ⓒ Macmillan Learning The accompanying graph depicts a hypothetical monopoly. Follow instuctions 1-3 below to identify the monopoly's profits. 1. Place point E at the monopoly's profit maximizing price and quantity. 2. Move the average total cost (ATC) curve to a position that depicts the monopoly earning a positive profit. 3. Place the area labeled Profit in the area of the graph that represents the monopoly's profit. Price ($ per unit) 10 9 8 7 5 3 2 1 0 0 1 O X E MR 2 3 4 5 6 Quantity (millions of units) 7 MC 00 D 9 ATC 10 Profitarrow_forward. A. How the price of the frim is determined from industry price?B. Compare the Automobile industry and agriculture according to market structure. C Give two examples of each 1. Legal Monopoly 2. Economic Monopolyarrow_forwardHotel Nemo is the only under-sea hotel in the nation. The graph shows its demand curve and marginal cost curve. Hotel Nemo is regulated to produce the efficient output. Draw a point at the firm's output and price when it produces the efficient quantity. Draw a shape to show the consumer surplus. Label it CS. What is the consumer surplus? Consumer surplus equals $ (...) 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- 0- Price and cost (dollars per booking) 0 MC 100 200 300 400 500 600 700 800 900 1000 Quantity (bookings per night) >>> Draw only the objects specified in the questioarrow_forward
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