PRICE OR COST (per pound) $14 13 12 11 10 9 8 7 6 543 2 1 0 MC=MR Marginal cost D 1 2 3 Average total cost MC P Monopoly produces less and charges more. Marginal revenue 4 5 6 7 QUANTITY (pounds of fish per hour) Demand The information diagram above shows a nondiscriminating monopolist's demand, marginal revenue and costs. What is the monopolist's economic profit? Please do not input the $ sign in the answer box. If your answer is $200, please input 200 for your answer.

PRICE OR COST (per pound) $14 13 12 11 10 9 8 7 6 543 2 1 0 MC=MR Marginal cost D 1 2 3 Average total cost MC P Monopoly produces less and charges more. Marginal revenue 4 5 6 7 QUANTITY (pounds of fish per hour) Demand The information diagram above shows a nondiscriminating monopolist's demand, marginal revenue and costs. What is the monopolist's economic profit? Please do not input the $ sign in the answer box. If your answer is $200, please input 200 for your answer.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter13: Monopoly And Antitrust

Section: Chapter Questions

Problem 6P

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Similar questions

How does the demand curve perceived by a monopolist compare with the market demand curve?
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
What is the usual shape of a marginal revenue cuwe for a monopolist? Why?
Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?
Is a monopolist allocatively efficient? Why or why not?
From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify. Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology requited having a wile matting to every home, it seemed plausible that telephone service had diminishing average costs and might require regulation like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has occurred over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)
How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive film?
In the middle of the twentieth century, major U.S. cities had multiple competing city bus companies. Today, there is usually only one and it runs as a subsidized, regulated monopoly. What do you suppose caused the change?
If public utilities are a natural monopoly, what would be the danger in deregulating them?
What is a legal monopoly?