Government policy action in case of price overcharging.

Question

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Answer 1

Question

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

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Answer 2

Question

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

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Answer 3

Question

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

Answer 6

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

Answer 7

Chapter 62, Problem 1CYU

a)

To determine

Government policy action in case of price overcharging.

Answer 8

a)

Expert Solution

Answer to Problem 1CYU

Government should make sure that cable companies charge reasonable prices and regulate the price.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Government should make sure that the company does not charge the cost of laying cable which is a fixed cost and regulate or monitor the price that should be charged equal to the average total cost to make it affordable for the consumer welfare.

Answer 13

Economics Concept Introduction

Government should regulate the price of essential good because a monopolist can charge a high price in making a high profit at the expense of consumer surplus which drives out or make the good unaffordable for some consumer.

Answer 14

b)

To determine

Government action policy in case of a potential merger.

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.

Answer 15

b)

To determine

Government action policy in case of a potential merger.

Answer 16

b)

Expert Solution

Answer to Problem 1CYU

Government should not approve the merger and allocate landing slots to other airlines after investigation.

Answer 17

b)

Expert Solution

Answer 18

b)

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

Government should not approve the merger and allocate landing slots to other airlines after investigation because it will increase the competition rather than creating a monopoly so the price of airfare would go down which increases the affordability of consumers and increases the social welfare of the society.

Answer 21

Economics Concept Introduction

A market has only two potential producers would charge a low price due to competition but if they merge then they will charge a high price creating a monopoly in the market which worse off consumers and bring inefficiency to the market.