Based on the given information, which of the following are places where a monopoly is more likely to spring up? Correct Answer(s) a desert town with a single well Drag appropriate answer(s) here a city where only one store has a source for lemon-flavored sparkling water + a large town with a single furniture store a port city where owning a dock requires a government license +
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- Classify the following as a government-enforced barrier to entry, a banker to entry that is not government-enforced, or a situation that does not involve a barrier to entry. A patented invention A popular but easily copied restaurant recipe An industry where economies of scale are very small compared to the size of demand in the market A well-established reputation for slashing prices in response to new entry A well-respected brand name that has been carefully built up over many yearsThe following diagram illustrates the demand curve fac- ing a monopoly in an industry with no economies or diseconomies of scale and no fixed costs. In the short and long run, MC = ATC. Copy the diagram and indicate the following: 2MA 0 D MC = ATC Output, Q a. Optimal output b. Optimal price c. Total revenue d. Total cost e. Total monopoly profits f. Total "excess burden" or "welfare costs" of the monopoly (briefly explain)Problem 3 uppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is E-12, while the price elasticity of demand for leisure travelers is Ey-24. The airline wants to set the prices separately for business and vacation travelers. Economy Firat Class Only i the marginal cost of transporting each passenger is the same, und the airline is able to separate the two groups perfoctly, what is the optimal surcharge (in ) on business travelers? Oor example. fleiture travelers pay 100, and business ravelers pay 200, then the surcharge is 100%) Anvwer b) Suppose that in order to separste business travelen, the airline must offer them slightly better conditions on board (for enample, serve them a meal). As a resul, the marginal cost of flying a basiness traveler is 30% higher than for a leivare traveler. What is the optimal surcharge (in ) on business fravelers in this case? Awwer Now suppose the airline introdaces a Basi Economy fare,…
- 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 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.
- Exercise 5. You are the manager for a monopoly with costs, demand, and marginal revenueas in the graph at the top on Figure 1.a. Does the fact that you operate in a monopoly always guarantee that you can achievehigher profits by increasing the price? Explain.b. Draw the area representing the profits on the top graph on Figure 1.c. Suppose one of your suppliers just announced an increase in prices for a specific partthat your product requires. What should the impact be to each of the curves on thetop graph of Figure 1? Explain carefully.d. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.ii. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.A natural monopoly exists when one firm can supply an entire market at a lower average total cost than can two or more firms, O a firm can engage in price discrimination. O a monopoly firm faces a horizontal demand curve. O the producers in an industry have formed a cartel. diseconomics of scale cxist in an industry.Assume 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.
- Graph shows the cost and revenue information for Shitotsu the monopolist. What are the levels of price, output, total (sales) revenue. and total profits if the monopolist were to produce at the positions (a) through (d) indicated in table below? Costs and revenues 30 27 24 21 18 15 9 6 3 0 3 6 9 12 15 Quantity per period 18 21 MR D=AR MC ACQUESTION 7 Ted is an architect who has a very unique style of designing buildings. Ted's style is so unique that other architects cannot replicate his work. Therefore, Ted can operate as a monopoly. Assume demand for Ted's work is linear and that he aims to maximise profits. Which of the following statements are true: The price Ted can charge is determined by the demand for his work. O Average total cost and the demand curve can be used to help calculate the profit from selling the profit maximising number of designs. Ted is a price taker. Ted's profit-maximising quantity will be determined by finding where his marginal revenue equals his marginal cost.When selling downloadable software, e-books, and music streaming platforms, the marginal cost of making one more unit is basically zero. The average total cost is currently $1 per book. If a monopoly is operating in this market and is maximizing profits, marginal revenue is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Greater than $0 Less than $0 $0 d $1 e There is not enough information to answer this question.