Question
In: Economics
If a regulatory commission wants to ensure that a monopolist produces the largest quantity of output...
If a regulatory commission wants to ensure that a monopolist produces the largest quantity of output that is consistent with earning a normal profit, it will require the monopolist to charge a price equal to its
A. marginal cost.
B. average fixed cost.
C. average variable cost.
D. average total cost.
E. total cost.
Solutions
Expert Solution
Option D
D. average total cost.
An economic profit is zero then the firm is earning a normal profit
Economic profit =(P-ATC)*Q
this is zero when P=ATC
The government will charge a price equal to the ATC.
Rahul Sunny answered 2 years agoRelated Solutions
Q4 i) Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or...
Q4 i) Under first-degree price discrimination, a monopolist
produces the efficient output. Is this true or false? Explain using
an appropriate diagram.
ii) Several generators pollute the environment by emitting
carbon dioxide. Generators have different costs of reducing carbon
emissions. The government wants to put a cap on total emissions.
Putting a cap on each generator is more efficient compared to
issuing tradeable emissions permits to each generator. Is this true
or false? Explain your answer.
Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or false? Explain...
Under first-degree price discrimination, a monopolist produces
the efficient output. Is this true or false? Explain elaborately
using an appropriate diagram.
Under first-degree price discrimination, a monopolist produces the efficient output. Is this true or false? Explain...
Under first-degree price discrimination, a monopolist produces
the efficient output. Is this true or false? Explain using an
appropriate diagram.
Briefly explain why the following statements are TRUE or FALSE: A monopolist produces the quantity at which MC = MR. A monopolist sets a price equal to MR
Briefly explain why the following statements are TRUE or FALSE:A monopolist produces the quantity at which MC = MR.A monopolist sets a price equal to MR.A monopolist faces a downward-sloping MR curve.A monopolist faces a perfectly elastic demand curve.A monopolist must lower price if it produces additional units.A monopolist is always able to price discriminate.
How does a healthcare organization ensure that they are meeting their regulatory obligations?
How does a healthcare organization ensure that they are meeting
their regulatory obligations?
Why is the establishment of the China Securities and Regulatory Commission (CSRC) considered a milestone event...
Why is the establishment of the China Securities and Regulatory
Commission (CSRC) considered a milestone event for the development
of Chinese stock market?
A monopolist faces the inverse demand for its output: p = 30 − Q. The monopolist...
A monopolist faces the inverse demand for its output: p = 30 −
Q. The monopolist also has a constant marginal and average cost of
$4/unit.
(a) (10 points) What is the monopolist’s profit-maximizing level
of output? What is the monopolist’s profit at this level of
output?
(b) (10 points) Calculate the consumer surplus and show it in a
graph along with the monopolist’s equilibrium; label the
monopolist’s equilibrium e M.
(c) (2.5 points) What would the competitive equilibrium be...
1.A single-price monopolist is a monopolist that sells each unit of its output for the same...
1.A single-price monopolist is a monopolist that sells each unit
of its output for the same price to all its customers. At its
profit-maximizing output level, the single-price monopolist
produces where price is ___________ than marginal cost because for
it price is __________ than marginal revenue and its demand curve
lies __________ its marginal revenue curve.
less; less; below
greater; greater; above
greater; greater; below
less; less; above
greater; less; below
2.
Exhibit 2
Quantity Sold
Price
(units)
Total Cost...
How could a regulatory commission induce a public utility company to operate as a perfect competitor...
How could a regulatory commission induce a public utility
company to operate as a perfect competitor on the long run? To what
difficulty would this lead? What compromise does a regulatory
commission usually adopt? What does PSC stand for?
Discuss how regulatory agencies such as the FDA work with pharmaceutical companies to ensure medications are...
Discuss how regulatory agencies such as the FDA work with
pharmaceutical companies to ensure medications are both safe and
effective for the public
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Please take time to view the video, “Was America Founded to Be Secular? “ as a...
- 7. A health psychologist knew that corporate executives in general have an average score of 80...
- Submission Guidelines This assignment may be submitted for full credit until Friday, October 4th at 11:59pm....
- Cara Ryder managers a ski school in a large resort and is trying to develop a...
- 1. Like most senses, the neurons that carry that carry the somatic sensations [touch, vibration, two-point...
- Explain how the Court has at times allowed the restriction of the civil rights of minority...
- 1. How do psychoanalytic and behavioral interpretations of childhood experience differ? 2. How does selective attention...
ADVERTISEMENT