Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 9IAPA
To determine
To find:
The price, economic profit and quantity of ticket when Company regulates a price equal to
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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…
3. The graph below shows a firm's demand, marginal revenue, and marginal
cost curves. Find the profit-maximizing level of output and mark it q*. Find
the price the firm should charge and mark it P*.
P
MC
X
D
MR
Quantity
4. The Whatsa Widget Company has a monopoly over the sale of widgets in a
small midwestern town. The firm's demand, marginal revenue, marginal cost,
and average cost curves are shown below. Find the firm's profit-maximizing
level of output and the price the firm will charge. Is the firm earning a positive
or a negative profit? Show the firm's profit (or loss) on the graph.
P
MC
X
MR
D
ATC
Suppose there are 5 types of consumers: Type A. Type B. Type C. Type D, and Type E. There are 3,000 of each type. Two software
products are sold by a monopolist: spreadsheets and word processing. Assume the marginal cost of production is $0.
Consumer Type
A
B
C
D
E
Number
3,000
3.000
3,000
3.000
3,000
Spreadsheet
800
300
200
100
0
b. What is profit at this pricing policy?
$
Willingness to Pay
Word Processor
Instructions: Round your answers to the nearest whole number.
a. What will be the profit-maximizing bundle price?
$
0
100
200
300
800
Both
800
400
400
400
800
c. How will profit from this pricing policy compare to profit under independent pricing of the two goods?
When pricing independently, the profit-maximizing price for spreadsheets is $
processing is $
d. What is profit under independent pricing?
$
and the profit-maximizing price for word
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
Similar questions
- Ron's Hamburger Place is the only restaurant in town, a monopoly Price and cost (dollars per hamburger) 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0 Price: $ [Select] ATC: $ [Select] 10 Profit: $ [Select] dan da MR MC Alt Text: Ron's Hamburger Place What is the profit maximizing output, price, and economic profit of Ron's Hamburgers, monopoly? Quantity: [Select] hamburgers per hour ATC 20 30 40 50 Quantity (hamburgers per hour) per hamburgerarrow_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_forwardQuestion 3: Monopoly graph. Do parts a, b., c Draw the short-run ATC, AVC, MC, MR and Demand graphs for a monopoly market. In each part, show Total Cost (TC), Total Revenue (TR), shade the profit or loss. Clearly label Q for the equilibrium quantity point and P for market price point. a. Draw a profit situation b. Draw a loss (not shutdown) situation c. Draw a monopoly and perfectly competitive industry on the same graph space. Only show equilibrium quantity and price of monopoly (Qm and Pm) and quantity and price for a perfect competition situation denoted as (Qpc and Ppc). You do not need to identify TR, TC or shade the profit in this graph.arrow_forward
- Use the diagram below to determine the price and quantity for a. a perfectly competitive, profit-maximizing industry? b. a profit-maximizing monopoly?arrow_forwardExercise A.12. Explain the differences between the supply and demand curves of a firm in perfect competition and a monopoly.arrow_forward10. Examine this information for a monopoly product. Price Quantity SR10.00 1000 8.00 2000 6.00 3000 4.00 4000 2.00 5000 .5 6000 a. Calculate total revenue. b. Calculate marginal revenue. c. What is the maximum output that the producer of this product would ever produce? d. Why would this firm never produce more than the output amount in part (c)? С.arrow_forward
- Intranet - Student Home Dashboard My courses My Media d. $800 Chapter 15: Attempt review meskanas.macewan.ca ChatGPT If a social planner were running a monopoly, that planner could achieve an efficient outcome by charging the price that is determined by what graphical point? a. the intersection of the marginal-cost curve and the demand curve b. the intersection of the marginal-cost curve and the marginal-revenue curve * C. the minimum point on the average-variable-cost curve d. the minimum point on the average-total-cost curve used to make the compact battery forarrow_forwardHot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. P (dollars per ride) Qd (rides per month) TC (dollars per month) 220 200 1 160 180 260 160 380 140 4 520 120 5 680 a. Construct Hot Air's total revenue and marginal revenue schedules. (and marginal cost schedule.) b. Draw a graph of the market demand curve and Hot Air's marginal revenue curve. c. Find Hot Air's profit-maximizing output and price and calculate the firm's economic profit. d. If the government imposes a tax on Hot Air's profit, how do its output and price change? e. If instead of taxing Hot Air's profit, the government imposes a sales tax on balloon rides of S30 a ride, what are the new profit-maximizing quantity, price, and economic profit?arrow_forwardside note number one is answered i need help with 2 , 3 and 4. Joyce owns a gas station and monopolizes gas sales along a remote stretch of road. In February, Joyce stayed open even though she earned negative economic profits. Draw a correctly labeled graph for Joyce’s gas station during February and show each of the following. The profit-maximizing output and price labeled QJ and PJ The average total cost curve labeled ATC A deadweight loss, completely shaded What must have been true for Joyce to continue operating during the month of February even though she earned negative economic profit? Assume that fixed costs for Joyce’s gas station decrease. Would Joyce’s profit-maximizing quantity increase, decrease, or stay the same in February? Explain. During the month of July, demand increases so that Joyce now earns a positive economic profit. However, she realizes her profits would have been higher if she had reduced the price of gasoline. At the quantity sold in…arrow_forward
- Please submit the answer and then watch the video feedback.Tony's Tree Service is the only firm in a town that removes large trees. Tony invested in costly bucket trucks and wood chippers when he began his business. Which of the following best describes the barrier to entry that allows Tony to keep his monopoly? a.monopoly resources b.government-created monopoly c.natural monopolyarrow_forwardC Monopoly Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $4 per unit. Tanya’s business can be considered a monopoly. The fixed cost is $2. Price Quantity $15 0 $12 1 $9 2 $6 3 $3 4 $1 5 1. Determine Tanya's profit-maximizing level of output? Explain how you know. 2. Calculate profit and demonstrate your methodarrow_forwardWhich of these situations is likely to produce a monopoly market structure? Group of answer choices a. Patent b. New design c. Great advertising d. Could be either a patent, new design or great advertisingarrow_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