When will producer surplus, as shown on a graph of demand and marginal cost, be exactly...

When will producer surplus, as shown on a graph of demand and marginal cost, be exactly equal to the profit earned by a monopolist firm (or any firm that faces its own demand curve)?

a. When fixed costs are equal to zero

b. When the marginal cost is constant

c. When the average total cost is u-shaped

d. When fixed costs and variable costs are equal

Expert Solution

a. When fixed costs are equal to zero.

(In this case, Marginal Cost = Average Cost so producer surplus will equal profits.)

Rahul Sunny answered 2 years ago

a. Show on a demand supply graph how consumer surplus and producer surplus is defined b....

a. Show on a demand supply graph how consumer surplus and producer surplus is defined b. In general to evaluate welfare effects we need to consider the welfare of groups of individuals. What problem does consumer surplus pose in this regard ? c. There are to firms in an economy facing a upward sloping supply curve in a perfectly competitive setting. Show graphically how you would find the total producer surplus in the economy.

Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves.

Assignment: Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted) Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...

When prices rise above equilibrium: A. producer surplus falls and consumer surplus rises. B. producer surplus...

When prices rise above equilibrium: A. producer surplus falls and consumer surplus rises. B. producer surplus falls and it is uncertain what happens to consumer surplus. C. consumer surplus falls and it is uncertain what happens to producer surplus. D. producer surplus falls and consumer surplus falls. Say which answer choice it is and why.

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total...

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total cost curves, explain how you find the profit maximizing level of output. (Note that this question asks about OUTPUT. The next question asks about PRICE.) Profits are maximized at the quatnity where total revenue is highest above total cost Profits are maximized at the quantity where ATC hits its minimum Profits are maximized at the quantity where marginal revenue equals marginal cost Profits are...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits and Does price discrimination lead to a more efficient or less efficient outcome?...

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average...

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average revenue for a perfectly competitive firm. Indicate the level of profit where profit is maximized, shade in the area of maximum profit, give the amount of maximum profit, and explain how this number is calculated. B.Graph the short-run supply curve for a perfectly competitive firm and explain where this short-run supply curve lies. Indicate the following curves on your graph: marginal cost curve, marginal...

This question is about producer surplus and consumer surplus. (a) Given a linear demand curve, if...

This question is about producer surplus and consumer surplus. (a) Given a linear demand curve, if domestic consumption changes by 10%, does consumer surplus also change by 10%? Why or why not? What is the relationship between change in domestic consumption and consumer surplus? Start with an algebraic form of a demand curve and to answer the question. (b) Is there a difference between producer surplus and profit? Explain.

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal...

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal revenue, the price the monopoly charges and the quantity it sells. Indicate where on this graph the socially efficient production and price would be. Indicate on this graph the deadweight loss. Why is there deadweight loss in a monopoly?

When it comes to supply and demand, government policies including trade, consumer and producer surplus play...

When it comes to supply and demand, government policies including trade, consumer and producer surplus play a key role. provide a real example of how consumer and producer surplus is used in the economy and why? Give and briefly discuss the importance of inelastic and elastic when it comes to purchasing certain goods and or services. Provide a real-world example beyond the text listing a pro and con of each one in your own words.

Graph & label all the parts for: 1) Consumer Surplus & 2) Producer Surplus. Define both and discuss...

Graph & label all the parts for: 1) Consumer Surplus & 2) Producer Surplus. Define both and discuss (in your own words) the economic implications of both. These can be on the same graph.

Question