Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 9, Problem 7SQ
To determine
The facts about the monopolist.
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a. 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.
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.
Which of the following is not a characteristic of a monopolist?
A. A monopolist can sell as much as he/she wants to.
B. A monopolist is a price maker.
C. A monopolist faces the market demand curve.
D. A monopolist is protected from competition.
E. A monopolist can earn economic profits.
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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Similar questions
- 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.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_forwardA monopolist has a demand curve given by Q=100-P and a total cost curve given by TC= Q2 + 16. a.Find the monopolist’s profit maximizing quantity and price. Indicate them on the graph. b.How much economic profit will the monopolist earn? c. Calculate the price elasticity of demand at the equilibrium price level.arrow_forward
- 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_forwardPlease refer to the graph attached. The graph shows the Demand, Marginal Revenue, and Marginal Cost curves for a monopolist. (a) What would be the monopolist profit maximizing price and quantity? (b) If market was perfectly competitive what would be the equilibrium price and quantity? (c)Which area shows the total surplus under perfect competition?arrow_forwardIt is possible for a monopolist's to earn economic profits even in the long run due to: a. its barriers to the entry of other firms. b. the nature of the monopolist's product. c. its practice of third-degree price discrimination.arrow_forward
- Use the graph to answer the following 5 questions. A single priced unregulated monopolist faces the demand curve and has the cost curves illustrated in the diagram below. 1. What is the profit Price maximizing quantity of output? 70 a) 25 units. b) 40 units. c) 50 units. d) 60 units. 60 e) 70 units. f) 80 units g) 90 units Marginal Cost 50 2. What price does this monopolist charge? a) $58 b) $20 40 Average Total Cost c) $35 d) $30 e) $45. f) $50 30 g) $40 h) $38 3. What are the total profits? a) $1200 b) $0 c) $1250 d) $200 e) $250. f) $2250. g) $150 h) $1600 20 10 Demand 20 40 60 80 100 120 140 160 Quantityarrow_forwardSuppose both a monopolist and a perfectly competitive firm charge a price corresponding to the quantity at the intersection of the marginal cost and marginal revenue curves. If this price is between each firm's average variable cost and average total cost curves, a. both firms will shut down in the short run. b. both firms will continue to operate in the short run. c. the perfectly competitive firm will continue to operate in spite of the loss but the monopolist will earn a profit. d. the perfectly competitive firm will continue to operate in the short run but the monopolist will shut down.arrow_forwardSuppose a monopolist’s profit-maximizing output is 200 units per week and that the firm sells its output at a price of $60 per unit. The firm has total costs of $9,000 per week. Assume the monopolist is maximizing its profit and earns $30 per unit 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?arrow_forward
- 2. A monopolist faces the demand curve p=250-2q and its total cost function is given by TC = F + 10q, where F is a non-negative fixed cost. a. Find the profit-maximising price and quantity produced for the monopolist. b. What is the highest value of F that allows the firm to earn profits (of zero or more) rather than losses?arrow_forward3. A monopolist faces demand p(Q) = 65 - 2Q and has total cost TC (Q) = 100 +5Q+Q². a. Calculate price, quantity and (producer and consumer) surplus under perfect competition. b. Determine the profit-maximizing price, quantity, and profit for the monopolist. d. c. Calculate consumer surplus, producer surplus and deadweight loss under monopoly. How would a price ceiling of $27 affect price, quantity, producer and consumer surplus, and deadweight loss?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
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