The Economics of Sports
6th Edition
ISBN: 9781138052161
Author: Michael A. Leeds, Peter von Allmen, Victor A. Matheson
Publisher: Routledge
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Question
Chapter 4, Problem 2P
(a)
To determine
Explain whether NHL is not a
(b)
To determine
Explain whether it is a monopoly and natural monopoly.
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Students have asked these similar questions
Do sports teams show profit maximization behavior or do they tend to incline monopoly pricing? As a result of that discussion, how would you treat these entities: Firm or club? Please explain.
Is a monopoly always bad for society?
Question 6 options:
None of the other answers is correct
Yes. Monopoly is always bad
Monopoly is not bad if its owner gives back to society in charity
No. For example, patents on medications create monopolies, and increase the price and reduce the quantity sold, but without them, no one would take the high costs of developing new drugs and the quantity will be... zero!
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
Chapter 4 Solutions
The Economics of Sports
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Similar questions
- When will a monopoly be economically efficient? a if it produces where the marginal cost equals the average cost b if it produces where the marginal cost is greater than the average cost c if it produces where the marginal cost is less than the average cost d if it produces where the marginal cost equals the pricearrow_forwardConsider this market. What would be the competitive price if this market wasn't a monopoly? Question 11 options: A B C Darrow_forwardFigure 3. P, Costs 20 15 50 40 30 30 40 45 MR D MC ATC Qarrow_forward
- What can destroy monopoly position?arrow_forwardWhen the National Hockey League locked out the hockey players in an effort to negotiate a salary cap with the players' union, it was an example of conflict: O within a bilateral monopoly. O between unions and hockey fans. O between monopsony on the employers' side and competition on the union side. O within monopolistic competition.arrow_forwardWhat is the deadweightloss?Explain how monopoly creates a deadweightloss. b) Draw and compare the price and the output of a monopoly with the competitive market. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- When a monopoly is producing profit-maximizing quantity, what is the relationship between marginal cost and price? a Marginal cost is greater than the price. b Marginal cost is equal to the price. c Marginal cost is less than the price.arrow_forwardPete has developed a new virtual reality headset that is so far advanced he effectively has a monopoly. His marginal cost is a constant $200, and his inverse demand is P = 800 – 4Q. What is the deadweight loss in this monopoly? a.) $0 b.) $45,000 c.) $11,250 d.) $22,500 Give typing answer with explanation and conclusionarrow_forwardUnder which of the following scenarios is it most likely that a monopoly power will be exhibited by firms? 1. When there are few firms in the market and the demand curve faced by each firm is relatively inelastic. 2. When there are many firms I. The market and the demand curve faced by each firm is relatively inelastic. 3. When there are few firms in the market and the demand curve faced by each firm relatively elastic. 4. When there are many firms in the market and the demand curve faced by each firm is relatively elastic. 5. When there are many firms in the market and the interaction between them is very strong.arrow_forward
- The ultimate determinant of monopoly power is the firm’s elasticity of demand. What three factors determine a firm’s elasticity of demand? The ultimate determinant of monopoly power is the firm’s elasticity of demand. What three factors determine a firm’s elasticity of demand?arrow_forwardQUESTION 3 You are considering subscribing to ESPN+. You are willing to pay up to $83 per year for a subscription. The current annual price is $26. Calculate your consumer surplus under these circumstances. QUESTION 4 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 0 45 90 135 180 225 270 315 360 405 450 495 540 585 630 675 Quantity P -MR---MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC(Q)= AC(Q) for all Q. Calculate the monopoly's profits if the monopoly charges the single profit maximizing price O 18,550 O 19,440 O 19,100 O 14,500arrow_forward2) A monopoly faces a demand elasticity of -10 and marginal cost of $2, what is the optimal monopoly price? (Calculate using the monopoly pricing formula) What is the Lerner index?arrow_forward
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