Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 24, Problem 3CQ
To determine
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Students have asked these similar questions
What stops oligopolists from acting together as a monopolist and earning the highest possible level of profits?
Why don’t monopolists try to establish the highest price possible, as many people allege? What would happen to sales? To profits?
What do economists mean when they say that competitive markets are more efficient than monopolistic markets?
Monopolistic markets result in lower price and higher production
Competitive markets result in lower prices, monopolistic market result in higher production
Competitive markets result in lower costs, lower prices, and higher levels of production
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Economics: Private and Public Choice (MindTap Course List)
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- Is monopolistic competition efficient and socially desirable for the welfare of the economyarrow_forwardWhat stops oligopolists from acting together as a monopolist and earning the highest possible level of profits? Is there a way for oligopolists to attempt to cooperate and maximize profits? What are the risks of such attempts (and ultimately, generally cause such attempts to fail)?arrow_forwardif a product moves from being monopolistic to a monopoly will the demand for the industry decrease? For example if a specific shampoo was only needed once a month because of new ingredients, will the demand for that industry go down?arrow_forward
- for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much it should produce to maximize its profit? for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much the firm should charge? for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 calculate its maximizing profitarrow_forwardDoes a monopolistic competitor produce too much or too little output compared to the most efficient level? What practical considerations make it difficult for policymakers to solve this problem?arrow_forwardMonopolistically competitive firms could increase the quantity they produce and potentially lower the average total cost of production. Why don't they do so?arrow_forward
- Does a monopolist have a supply curve? Explain your answer. What are the different types of price discrimination? Differentiate between an oligopoly and a monopolistic competition (i.e. number of firms and the degree of product differentiation). How are skilled and unskilled workers in an economy likely to be affected if the firms adopt skill-biased technologies?arrow_forwardSuppose that, due to a successful advertising campaign, a monopolistic competitor experiences an increase in demand for its product. How will that affect the price it charges and the quantity it supplies?arrow_forwardExplain how monopolistic competition is different from perfect competition and monopoly in both the short- and long run?arrow_forward
- How is the perceived demand curve for a monopolistically competitive firm different from the perceived demand curve for a monopoly or a perfectly competitive firm? Why?arrow_forwardWhy are monopolies for the most part illegal?arrow_forwardWhen oil prices increased 10 fold during the 1973 – 80 energy crisis, many oil companies made huge profits. During this energy crisis, Congress considered imposing an “excess profits” tax on oil companies. If you were in Congress, would you vote for such a tax? Do unexpected monopolistic profits serve any useful function in a market economy?arrow_forward
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