Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 9, Problem 4SQP
(a)
To determine
Explain the reason for agreeing or disagreeing with the given statement.
(b)
To determine
Explain the reason for agreeing or disagreeing with the given statement.
(c)
To determine
Explain the reason for agreeing or disagreeing with the given statement.
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Students have asked these similar questions
explain why you agree or disagree with the following statements:
a. "all monopolies are created by the government"
b "the monopolist charges the highest possible price"
c. "the monopolist never take a loss"
1. Explain how a monopolist chooses the quantity of output to produce and the price to
change.
2. Why is a monopolist's marginal revenue less than the price of its good? Can marginal
revenue ever be negative? Explain.
3. Describe the ways policymakers can respond to the inefficiencies caused by
monopolies. List a potential problem with each of these policy responses.
Identify and Graphically illustrate the similarities or differences between a perfectly competitive firm and a monopolist.
a. Compare the demand curve for a perfectly competitive firm and a monopolist.
b. Compare the price charged by a perfectly competitive firm and a monopolist.
c. Compare the amount of consumers’ surplus received by buyers under a monopoly with the amount received under perfect competition.
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
Knowledge Booster
Similar questions
- Critically evaluate and explain each statement:a. Because they can control product price, monopolists are always assured of profitable production by simply charging the highest price consumers will pay.b. The pure monopolist seeks the output that will yield the greatest per-unit profit. c. An excess of price over marginal cost is the market’s way of signaling the need for more production of a good. d. The more profitable a firm, the greater its monopoly power. e. The monopolist has a pricing policy; the competitive producer does not. f. With respect to resource allocation, the interests of the seller and of society coincide in a purely competitive market but conflict in a monopolized market. g. In a sense the monopolist makes a profit for not producing; the monopolist produces profit more than it does goods.arrow_forwardCritically evaluate and explain each statement a. Because they can control product price, monopolists are always assured of profitable production by simply charging the highest price consumers will pay. b. The pure monopolist seeks the output that will yield the greatest per-unit profit. c. An excess of price over marginal cost is the market’s way of signaling the need for more production of a good. d. The more profitable a firm, the greater its monopoly power. e. The monopolist has a pricing policy; the competitive producer does not. f. With respect to resource allocation, the interests of the seller and of society coincide in a purely competitive market but conflict in a monopolized market.arrow_forwarda. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output that maximizes profit. At that level of output, show on your graph the firm’s total revenue and total cost. b. Draw the demand curve, marginal revenue curve, average total cost curve, and marginal-cost curve for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Why the demand curve for a firm operating in monopolistic competition is more elastic compared to the firm operating as a monopoly. Kindly answer all the sub parts.arrow_forward
- Suppose that a monopolist can segregate his buyers into two different groups to which he can charge two different prices. In order to maximize profit, the monopolist should charge a higher price to the group that has a. The higher elasticity of demand. b. The lower elasticity of demand. c. Richer members.arrow_forwardWhen the market for a good is efficient, the good’s price is $14. When the market is controlled by a monopoly, the good’s price is $18. What is a possible value for the price of the good if there are two competing oligopolists in the market? A. $14 B. $18 C. $16 D. $19 E. $13 _______arrow_forwarda. Why is a monopolist’s marginal revenue less than the price of its good? Can marginal revenue ever be negative? Explain. b. Draw the demand, marginal-revenue, average total-cost, and marginal-cost curves for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Describe the two problems that arise when regulators tell a natural monopoly that it must set a price equal to marginal cost.arrow_forward
- Which of the following statements is false? Select one: a. Ceteris paribus, a monopolist charges the same price as a perfect competitor. b. All of the other statements are false. c. The monopolist never takes a loss. d. All monopolies are created by the government.arrow_forwardWhich two kinds of monopolies exist? Which is more economically efficient? Why?arrow_forwardThe accompanying diagram depicts a monopolist whose price is regulated at $10 per unit. Use this figure to answer the questions that follow. a. What price will an unregulated monopoly charge?$ b. What quantity will an unregulated monopoly produce?unitsc. How many units will a monopoly produce when the regulated price is $10 per unit?unitsd. Determine the quantity demanded and the amount produced at the regulated price of $10 per unit. Is there a shortage or a surplus?Quantity demanded: units Amount produced: unitsThere is: (Click to select) a shortage neither a shortage nor a surplus a surplus .e. Determine the deadweight loss to society (if any) when the regulated price is $10 per unit.$ f. Determine the regulated price that maximizes social welfare. Is there a shortage or a surplus at this price?$ There is (Click to select) neither a surplus nor a shortage a surplus a shortage at this price.arrow_forward
- Monopoly The graph below illustrates a monopolist's demand, MR, and cost curves. a. What quantity will the monopoly produce and what price will the monopoly charge? What will its profits be? b. Suppose the monopoly is regulated. If the regulatory wants to achieve economic efficiency, what price should it require the monopoly to charge? How much output will the monopoly produce at this price? What will its profits be? Price and cost (per necklace) 260.00 240.00 220.00 200.00 180.00 160.00 140.00 120.00 100.00- 80.00 60.00 40.00 20.00- 0.00+ 0 MC ATC MR D 8 10 12 14 16 18 20 22 24 26 Quantity (diamond necklaces)arrow_forwardGive two examples of price discrimination. In each case, explain why the monopolist chooses to follow this business strategy. What are the three reasons that a market might have a monopoly? Give two examples of monopolies and explain the reason for each.arrow_forwardWhen does a company officially become a monopoly? a. when it controls more than 25 percent of the output of a certain product b. when the government decides the company is a threat to the national economy c. when a company controls the output for a marketable product without meaningful competition d. when a company controls more than 50 percent of the output of a productarrow_forward
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