Output Total Total (Q) Price Revenue Cost 1 $20.00 $2.50 $15.00 $5.00 3 $10.00 $7.50 4 $5.00 $10.00 The table above shows demand and cost information for a firm that has market power and can set its price. If the firm is able to Perfectly Price Discriminate, it's profit maximizing Output (Q) is: Select one: О а. 3 b.
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- Refer to the graph shown. The equilibrium quantity for the monopolist represented is: MC Price $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 O OO O ATC MR 0 10 20 30 40 50 60 70 80 90 100 Quantity 100 50 30 70Price and cost MO 120 Township is a small, isolated community served by one newspaper that can meet the market demand at a lower cost than two or more newspapers could. The Township Gazette is the only source of news. The graph shows the marginal cost of printing the Township Gazette and the market demand for it. The Township Gazette is a profit-maximizing, single-price monopoly. What is the efficient number of copies of the Township Gazette and what is the price at which the efficient number of copies could be sold? 100- The efficient number of copies of the Township Gazette is and the price at which this number could be sold is cents a copy. GALLE 80- 60- 40- 20- D 04 0 100 200 300 400 500 Quantity (newspapers per day) 600 5The accompanying diagram shows demand and long-run cost conditions in a price-searcher market with high barriers to entry. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity. Then, use the gray rectangle (star symbols) to shade the area corresponding to the profit or losses in this industry. PRICE 6 7 5 2 1 0 MC 0 1 2 3 LRATO MR QUANTITY 5 6 7 D 8 Monopoly Outcome Profit or Loss Which of the following would best describe why an industry is likely to be monopolized? O The marginal cost curve intersects the demand curve at the profit-maximizing quantity.
- 2) ABC Corp. is selling a children's alphabet book and an iPad app. Suppose the reservation prices for four consumers are given by the table below: Aaron Cost Betsy Carolyn Desmond Book 11 12 7 4 3 App 5 2 9 10 1 a) If ABC prices them separately, what prices should it charge, and how much profit does it make? b) If the Corp. prices the products as a bundle, and only offers the bundle, what price should it charge and how much profit does it make? c) If ABC Corp. offers the book or app separately but also offers a bundle, what prices should it charge, and how much profit does it make?Andrea’s Day Spa began to offer a relaxingaromatherapy treatment. The firm asks you how muchto charge to maximize profits. The first two columnsin Table 10.5 provide the price and quantity for thedemand curve for treatments. The third column showsits total costs. For each level of output, calculate totalrevenue, marginal revenue, average cost, and marginalcost. What is the profit-maximizing level of output forthe treatments and how much will the firm earn inprofits?part 9 10 11 9. How doesthe price and output of a monopolist differ from thatofthe perfectly competitive A:industry? i.10. Whatportion of the consumer surplusin the competitive situation wastransferredto the firm inthe monopoly situation?11. How does a monopoly affect consumersurplus? Is this good or bad?
- Assume a monopolistic publisher agreed to pay an author 10% of the total revenue from the sale ofthe text. Will the author and the publisher want to charge the same price for the text? Explain inthe light of price discrimination?Alpha Gear is a fitness apparel company. One of their best selling products are their joggers. The company sells joggers under a block pricing scheme that charges $13 per pair of joggers if the customer buys up to 10 joggers and $8 if they buy 11 to 20 joggers. The demand curve is Q-1400 - 25P, and the marginal cost of making a pair of joggers is $5. What are the profits for Alpha Gear under this pricing scheme? 8975 8600 3600 12200 000Assume the graph below shows the cost and revenue structure of a monopoly. Price and costs (dollars per unit) 10 8 2 0 2 4 MR MC ATC D 8 10 12 Quantity (units per year) 6 a) Find a profit-maximizing output level. Calculate the profit/loss at the profit-maximizing production level. b) Calculate market surplus when a monopoly operates at the profit-maximizing point and market surplus when a monopoly operates at the production level where it neither makes profit nor loss.
- The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the long run? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.Many schemes for price discrintination involve somecosL For example, discount coupons take up the timeand resources of both the buyer and the seller. Thisquestion considers the implications of costly pricediscrimination. To keep things simple, let's assumethat our monopolist's production costs arc simplyproportional to output so that average total cost andmarginal cost arc constant and equal to each other.CHAPTER 15 MONOPOLY 317a. Draw the cost., demand, and marginal-revenuecurves for the monopolist. Show the pricethe monopolist would charge without pricediscrimination.b. ln your diagram, mark the area equal to the mernopolist's prolit and call it X. Mark the area equalto consumer surplus and call it Y. Mark the areaequal to the deadweight loss and call it Z.c. Now suppose that the monopolist can perfectlyprice discriminate. What is the monopolist'sprofit? (Give your answer in terms of X, Y, and Z.)d. What is the change in the monopolist's prolit fromprice discrimination? What is the…