Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 21, Problem 1P
Subpart (a):
To determine
Whether the valley will be ruled as a monopoly .
Subpart (b):
To determine
can the valley be ruled as monopoly by the court when all barriers are relevant.
Subpart (c):
To determine
When all fruits are there, can the valley be ruled as monopoly by court.
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Students have asked these similar questions
You manage one of three firms in a market. You expect that one of the other firms will produce 20
units of output and the other firm will produce 10 units of output. Your monopoly quantity is 40.
How much output should your firm produce given your expectations regarding the output levels of
the other two firms?
O 25
O 15
O 30
O 40
1.
The table below represents the demand for Widgets, Inc., which has a
monopoly in the sale of widgets. Calculate total revenue and marginal
revenue for the levels of output given. Draw the demand curve and the
marginal revenue curve in a same graph.
Quantity
0
1
2
3
4
LO
5
Price
$25
21
17
13
9
LO
5
1. A large share of the world supply of diamonds comes
from Russia and South Africa. Suppose that the mar-
ginal cost of mining diamonds is constant at $1,000 per
diamond and the demand for diamonds is described
by the following schedule:
Price
$8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Quantity
5,000 diamonds
6,000
7,000
8,000
9,000
10,000
11,000
12,000
a. If there were many suppliers of diamonds, what
would be the price and quantity?
b. If there were only one supplier of diamonds, what
would be the price and quantity?
c. If Russia and South Africa formed a cartel, what
would be the price and quantity? If the countries
split the market evenly, what would be South
Africa's production and profit? What would hap-
pen to South Africa's profit if it increased its pro-
duction by 1,000 while Russia stuck to the cartel
agreement?
d. Use your answers to part (c) to explain why cartel
agreements are often not successful.
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