The perfectly competitive firm exhibits resource allocative efficiency (P = MC), but the single-price monopolist does not. What is the reason for this difference? b. Explain three reasons why monopolies arise. c. Why is the marginal revenue of a perfectly competitive firm equal to the market price? d. Would a perfectly competitive firm produce if price were less than the minimum level of average variable cost? Why?
Q: define the cross-price elasticity of demand? 2.d) Compare and contrast monopoly and perfect…
A: The cross-price demand elasticity(XED) measures the sensitivity of the demand of the quantity(Qd)…
Q: 3. If the demand function for a monopolist's product is p = XX0 – 0,05q and the cost function is c=…
A: Monopolists are price makes and not price takers, they determine profit maximizing price depending…
Q: a. Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of…
A: a. Perfect competition refers to the situation where there are many buyers and sellers exist in the…
Q: Currently, a monopolist's profit-maximizing output is 500 units per week and it sells its output at…
A: Total revenue (TR): - it is the total amount that a seller receives selling his goods and services…
Q: Why the demand curve for a firm operating in monopolistic competition is more elastic compared to…
A: Monopoly - It is characterized by a single seller and many buyers. the seller is a price maker. They…
Q: define the income elasticity of demand? b) what is the normal and an inferior good? c) define the…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: Price (dollars per unit) 100 80 60 40 20 MC MR D 0 20 40 60 80 Quantity (units per week) Figure 3 a)…
A: Perfect competition: It refers to the competition under which there is a small number of firms in…
Q: f a natural monopolist practices perfect price discrimination, how does it affect the…
A: Price discrimination refers to the practice of charging different prices from different buyers. This…
Q: QUESTION 13 What is the deadweight loss, if Facebook acts as a single-price monopolist? QUESTION 14…
A: Perfect Price discrimination, is the highest level of price discrimination in which each unit of…
Q: Let’s assume a monopolist has the following inverse demand curve: p = 248 −3q and the following cost…
A: Introduction Perfect competition is a form of market where large number of firms sells homogeneous…
Q: Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output…
A: The perfect competition market consists of a large number of sellers who are price takers as the…
Q: What are the Starbucks profit-maximizing price and quantity as monopolist's? Why? Discuss what is…
A: Given Starbucks is considered as monopolist and the demand function is given by P=11-Q…
Q: Which of these relations is always TRUE for monopolies? MR > D P > MR P > AC TR < T
A: The profit maximizing level of output produced by the monopoly at point where MC is equal to MR. For…
Q: Assume that the firm in the short run is earning super normal profit. Explain what will happen to…
A: Monopolistic competition is an imperfect competition where there is a large number of sellers…
Q: a) Explain the difference between the behaviour of a monopolist and a firm in competition. (5P) b) A…
A: Market structure refers to the different markets with different characteristics. Characteristics of…
Q: Which of the following is true of the model of monopolistic competition? a. Barriers to entry…
A: In Monopolistic competition firms earn positive economic profit in the short run but in the long run…
Q: Is a monopoly always bad for society? a. No. For example, patents on medications create monopolies,…
A: Monopoly is a form of market in which only single firm exists.
Q: Demand and Cost facing Monopolist Price Quantity Total Revenue Marginal Revenue Total Variable Cost…
A: Under Perfect competitive market AR=MR=P, and optimum condition P=MC Under monopoly market profit…
Q: Do you expect that an increase in the price of a product generates a larger decrease in quantity…
A: When talking about a monopolistically competitive market, it can be said that there ar relatively…
Q: Q1: If only one airline service a town, does a monopoly exist? What about competition from other…
A: The type of structure of the market having only a single seller and where there exists significant…
Q: Following information shows that a firm offering a good at different prices to groups of…
A: A) Ujj
Q: Explain fully why perfectly competitive firms and monopolies maximize profits by choosing the…
A: The greatest benefit is the degree of yield where MC rises to MR. However long the income of…
Q: Which of the following statements are true about this natural monopoly? Check all that apply. The…
A: a) At profit maximizing level:- MR=MC Therefore;
Q: Solve the attachment
A: Answer - "Thank you for submitting the question. But, we are authorized to solve one question at a…
Q: Consider a monopoly market with demand curve Q(P) = $. Suppose that producing a good costs $1 per…
A: Monopolist will produce the goods where marginal revenue is equal to marginal cost .
Q: Andrew Carnegie's monopoly in steel was never as complete as John D. Rockefeller's monopoly in oil.…
A: In monopoly, there is a single seller of a product in the market with many buyers. Eqm output is…
Q: Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: a. In the short run, if a perfectly competitive firm produced at the quantity of productive…
A: a. In perfect competition, there is a large number of buyers and sellers, and firms in perfect…
Q: following for ABC: Market demand: Q = 195 – 0.5P Marginal Revenue: MR = 390 – 4Q Total Cost: TC =…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: A government may create and regulate natural monopolies because O A they can handle the costs of…
A: A natural monopoly is a type of monopoly that experiences economies of scale, i.e., a decrease in…
Q: h. Find the size of CS, PS, TS, and DWL from part e, part f, and part g. Fill in the blanks.…
A: Perfect competition is the market structure in which there is large number of buyers and sellers…
Q: Does a monopolistically competitive firm have an incentive to produce at the level of output that…
A: The basic characteristics of Monopolistic competition are – Differentiated products, many firms, and…
Q: Suppose a perfectly competitive industry can produce a product with total cost TC = Q? and the…
A: For perfectly competitive firm in maximizing its profits is to calculate the optimal level of output…
Q: of buying a new head office for a firm that sells ora competitive market has increased by 2%. What…
A: *Answer: Since you have asked multiple questions, we will solve the first question for you. If you…
Q: Why don't all firms behave like monopolists? Oa. Competitor firms may sell the product at a lower…
A: All firms do not behave like monopolists. In monopoly the firm has a monopoly power because the good…
Q: Draw the cost curves for a typical firm. Explain how a competitive firm chooses the level of output…
A: Hi Student, Thanks for posting the question. As per the guideline we are providing answer for the…
Q: Why is marginal revenue less than the price for monopolies? Can marginal revenue ever be negative?…
A: Monopoly: It refers to that market structure where there exists only one firm who produces the good.…
Q: What is the usual shape of a marginal revenue curve for a monopolist? Why? 2.When a monopolist…
A: A monopoly is a market structure in which only one firm sells output, this firm has all market power…
Q: 1. CLARA is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal…
A: P = 40 - Q [or, Q=40-P] TR = 40Q - Q² MR = 40 - 2Q , TC = 20 + Q² MC = 20
Q: monopoly price necessarily higher than the competitive price? Why monopolies arise? Discuss the…
A: A monopoly can be referred to as a specific type of market structure. A monopoly exists in any…
Q: a. Apple faces competition from many other firms in the world market for mobile phones; therefore,…
A: Perfect competition is a market structure where there are many sellers of a product and all the…
Q: b. Give two examples of price discrimination. In each case, explain why the monopolist chooses to…
A: A monopolist has complete power over the market. He faces the total market demand(DD). Even if there…
Q: When we compare monopoly to perfect competition in the long run,we expect the monopoly model to…
A: In long run, perfectly competitive firms produce normal profit and price is equal to long run AC.
a. The
b. Explain three reasons why
c. Why is the marginal revenue of a perfectly competitive firm equal to the market price?
d. Would a perfectly competitive firm produce if price were less than the
minimum level of
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 2 images
- (a) What is meant by consumer surplus and producer surplus? Using a diagram show that there is a deadweight loss to society from monopoly in terms of total surplus. (b) In what ways is a monopolistically competitive firm likely to be less efficient than one under perfect competition?a. b. If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15. Using the mark-up rule, what is the optimal price for the firm to charge? If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the mark-up rule to find the new optimal price for the firm to charge? What is the defining feature of a Pure Selling Problem and what impact does it have one the firm's goal to maximize profit?A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?
- Which market offers higher consumer surplus and why? The perfectly competitive firm or the monopoly firm?A perfectly competitive firm is considered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. a. Demonstrate a simplified graph to show that a perfectly competitive firm incurring loss, but has reached the minimum condition to keep operating in the market. b. Does the firm operate in the short or long run based on your answer to question (a). Why?You live in a town with 300 Adults and 200 children, and you arc thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customer: a. To maximize profit, what price would you charge for an adult ticket? For a child's ticket?How much profit do you make?b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make?c. Who is worse off because of the law prohibiting price discrimination? Who is better off? (If you can, quantify the changes in welfare.)d. If the fixed cost of the play were $2,500 rather than $2,000, how would your answers to parts (a), (b), and (c) change?
- Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. If the goal of your business is to maximize profit, how much will it produce, and what price will it charge? -The business will exit the market because it is unable to cover its average costs. -The business will produce 40 units, and charge a price of $5. -The business will produce 30 units, and charge a price of $3. -The business will produce 30 units, and charge a price of $6.Comparing a perfectly competitive market to a monopoly, which of the following is true? a. Price will be higher and quantity will be lower in the perfectly competitive market than in the monopoly. b. Price will be equal to marginal revenue in the perfectly competitive market but will be higher than marginal revenue in the monopoly. c. at that point on the market demand curve which intersects the marginal cost curve. d. Price will be higher than marginal cost in the perfectly competitive market but will be equal to marginal cost in the monopoly.Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.
- Compare and contrast the decision-making processes of a competitive firm versus a monopoly firm. a. The difference between C and M markets in terms of the (homogeneity or uniqueness of product, barriers to enter and number of firms). b. You must point to the difference in the demand curve for a C firm and that for a M firm. c You must refer to the long run profit (or not) of the C as well as M firm. d. You must point to whether C and M firms are efficient or NOT. Graphs are welcome, not manadatory.d. What is the deadweight loss in this market, if any? e. How does a firm decide to increase or decrease output? i. What do they do when marginal revenue is less than marginal cost? ii. What do they do when marginal revenue is more than marginal cost? f. When does a firm decided to shut down verses temporarily stopping production? g. In this market the demand curve is what? i. Short run ii. Long run h. In this market the supply curve is what? i. Short run ii. Long run4. Draw a demand, marginal revenue and marginal cost curve for a monopoly firm. Be sure to label axes and curves. a. Identify efficient and equilibrium quantity exchanged. b. Identify monopoly price. c. Explain why I am not asking for a supply curve. 5. Explain what is the relationship between marginal cost and average total costs for a firm or industry exhibiting each of the following: a. Economies of scale. b. Constant returns to scale. c. Diseconomies of scale. 6. Assume that the economy is facing the zero lower bound. a. Explain how the Federal Reserve might engage in expansionary monetary policy and what that will do when the economy is facing the zero lower bound. b. Explain how expansionary fiscal policy might influence the economy when facing the zero lower bound. Please answer all questions
