Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 9, Problem 4SQ
To determine
The monopolist and the
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Monopolistically competitive firms are most likely to have profits:A. That are higher than competitive firms’ profit in the long run.B. Higher in the long run than in the short run.C. Zero in the long runD. Equal to the profit of a monopolist.
For a monopolist,
a. price is always less than the MC of the good.
b. marginal revenue is always less than the price of the good.
c. marginal cost is always greater than average total cost.
d. marginal revenue equals marginal cost at the point where total revenue is maximized.
Currently, a monopolist's profit-maximizing output is 400 units per week and it sells its output at a price of
S60 per unit. The firm's total costs are $10,000 per week. The firm is maximizing its profit, and it earns $40
in extra revenue from the sale of the last unit produced each week.
a. What are the firm's weekly economic profits?
b. What is the firm's marginal cost?
c. What is the firm's average total cost?
Chapter 9 Solutions
Micro Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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- 2. If a monopolist's marginal revenue is $45 a unit and its marginal cost is $45, then: a. To maximize profit the firm should decrease output. b. To maximize profit the firm should O continue to produce the output it is producing. c. To maximize profit the firm should increase output. d. Not enough information is given to say what the firm should do to maximize profit.arrow_forwardFor a monopolist to produce one more unit of output, Select one: a. the price must be equal to the marginal cost b. the difference of total revenue gained and total revenue lost must be greater than zero c. the price must be equal to the average variable cost. d. demand must be in the in inelastic range of the demand curve e. the difference of the price and marginal revenue must be equal to zeroarrow_forwardSuppose 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 wordarrow_forward
- The table below presents the demand schedule and marginal costs facing a monopolist producer. a. Fill in the total revenue and marginal revenue columns. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Leave no cells blank. Enter 0 if appropriate. 1 2 3 5 LA 7 8 P ($) 11 9 units 8 7 5 4 TR ($) b. What is the profit-maximizing level of output? MR ($) MC ($) c. What price will the monopolist charge to maximize profits? N 3 4 6 7 Karrow_forwardIn long run equilibrium, the pure monopolist can make pure profits because of A. Blocked entry B. The high price he charges C. The low LAC costs D. Advertisingarrow_forwardIf the monopolist is unregulated, what will be the profit? a. $30 b. $10 c. $15 d. $20arrow_forward
- Suppose a pure monopolist faces the following cost data, as shown by the table on the left, and the demand schedule, as shown on the right. a. Calculate the missing TR and MR amounts. Instructions: Enter your answers rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers Production and Costs Demand Total Product Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost Price Quantity Demanded Total Revenue Marginal Revenue 0 — — — — $115 0 $0.00 — 1 $60.00 $45.00 $105.00 $45 100 1 2 30.00 42.50 72.50 40 83 2 3 20.00 40.00 60.00 35 71 3 4 15.00 37.50 52.50 30 63 4 5 12.00 37.00 49.00 35 55 5 6 10.00 37.50 47.50 40 48 6 7 8.57 38.57 47.14 45 42 7 8 7.50 40.63 48.13 55 37 8 9 6.67 43.33 50.00 65 33 9 10 6.00 46.50 52.50 75 29 10arrow_forwardWhat is the profit-maximizing (equilibrium) condition that a monopolist uses to set its quantity of output? Question 8Answer a. Marginal Cost = Marginal Revenue b. Price = Marginal Revenue c. Price = Average Cost d. Price = Marginal Cost e. Supply = Demandarrow_forward1. What is the profit maximizing principle for a monopolist? a. Price=Marginal Cost b. Marginal Revenue=Marginal Cost c. Marginal Revenue<="" abel="" style="font-family: "Open Sans", sans-serif; text-shadow: none !important; letter-spacing: normal !important;"> d. None of the abovearrow_forward
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