Question
In: Economics
A monopolist charges a price that is ________ and produces ________ than a perfect competitor. A....
A monopolist charges a price that is ________ and produces ________ than a perfect competitor.
- A. higher; less
- B. lower; less
- C. higher; more
- D. lower; more
Solutions
Expert Solution
A. higher; less
A monopolist's marginal revenue curve is always below the demand curve and the price is higher than the marginal cost so a monopolist will charge higher and produces less than the perfect competitor
Basically, a firm will produce at the quantity at which MC = MR but will price the product at the cost when it is produced.
Look at the following graph
So a monopolist will produce at A and will charge the price at B.
Rahul Sunny answered 2 years agoRelated Solutions
How does the demand curve faced by the monopolist differ from that confronting the perfect competitor?...
How does the demand curve faced by the monopolist
differ from that confronting the perfect competitor?
Why do they differ?
A monopolist charges a price of $15 per unit. A the point of intersection of the...
A monopolist charges a price of $15 per unit. A the point of
intersection of the marginal revenue and marginal cost curves, the
output was 10 units and the marginal cost was $7. Average total
cost for 10 units of output was $7. What is this monopolist’s
profit?
Hint: Profit = Total Revenue - Total Cost
Total Revenue = Price x Quantity
Total Cost = Average Total Cost x Quantity
a.
$80
b.
$70
c.
$120
d.
$150
When a monopolist changes from charging a single price to perfect price discrimination, it a. Reduces...
When a monopolist changes from charging a single price to
perfect price discrimination, it
a. Reduces the quantity produced and maintains profits at a fixed
level.
b. Reduces the firm’s profits and output.
c. Increases consumer surplus and decreases producer surplus.
d. Increases profits and eliminates consumer surplus
1) While a perfectly competitive firm charges P=MR=MC. the monopolist firm charges a price that is...
1) While a perfectly competitive firm charges P=MR=MC. the
monopolist firm charges a price that is
Dalton Utilities
Burger King
Belk Department Store
Smith's Wheat Farm
2) A natural monopoly is said exist if
a firm is a price taker in a perfectly competitive market.
there are few, if any barriers to entry.
the economies of scale are such that many firms produce a
homogenous product.
economies of scale are so pronounced in an industry that only
one firm can...
Suppose you learn that a perfect competitor minimizes average variable economic cost when it produces 100...
Suppose you learn that a perfect competitor minimizes average
variable economic cost when it produces 100 units per day and
minimizes average total economic cost when it produces 250 units
per day. The minimum average variable cost is $30 and the minimum
average total cost is $50. Presume that the firm maximizes profit.
Sketch the cost curves and use the sketch to help you answer the
questions.
1a) When the market price is $35, in the long run
the number...
A monopolist: Maximizes profit at the output where price equals marginal cost. Charges a higher price...
A monopolist:
Maximizes profit at the output where price equals marginal
cost.
Charges a higher price than a competitive firm, ceteris
paribus.
Is a price taker since it has market power.
Cannot earn an economic profit in the long run.
A profit-maximizing monopolist charges a price of $36. The intersection of the marginal revenue and marginal...
A profit-maximizing monopolist charges a price of $36. The
intersection of the marginal revenue and marginal cost curves
occurs where output is 20,000 units and marginal cost is $24.
Average total cost for 20,000 units of output is $32. As a result,
the monopolist’s profit is more than $80,000.
true or false
The continuous downward slope of the average total cost curve
suggests that the profit-maximizing natural monopolist is able to
exploit economies of scale to keep competitors from successfully...
Suppose a monopolist charges a price of $27 for its product and sells 10 units at...
Suppose a monopolist charges a price of $27 for its product and
sells 10 units at that price. At 10 units of production the firm
has average fixed cost equal to $10 and average variable cost equal
to $12. How much total profit is the firm earning at this price?
(show your work)
explain why you agree or disagree that the monopolist charges the highest possible price
explain why you agree or disagree that the monopolist charges the
highest possible price
2. Why does a price-discriminating monopolist earn more profit than a monopolist who does not price-discriminate?...
2. Why does a price-discriminating monopolist earn more profit
than a monopolist who does not price-discriminate? What must a
monopolist do in order to successfully price discriminate? Give
three real world examples of price discrimination practices.
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