Question
In: Economics
- For a monopolist who faces a downward-sloping demand curve, marginal revenue is less than price whenever
TRUE OR FALSE. PROVIDE EXPLANATION.
- For a monopolist who faces a downward-sloping demand curve,
marginal revenue is less than price whenever
quantity sold is positive.
- Since a monopoly charges a price higher than marginal cost, it will produce an inefficient amount of output
- A monopolist will always equate marginal revenue and marginal cost when maximizing profit
- If s/he produces anything at all, a profit-maximizing
monopolist with some fixed costs and no variable costs
will set price and output so as to maximize revenue
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
2) Demand and Marginal Revenue a) Explain why a single price monopolist faces a downward sloping...
2) Demand and Marginal Revenue
a) Explain why a single price monopolist faces a downward
sloping demand and why their downward sloping demand results in
P>MR.
b) Explain why a 1) perfectly competitive market and 2) Perfect
(first degree) price discriminating monopolist determines their
demand curve, in general compare their demands, and despite their
difference in demand why P=MR for both.
c) For a member of a cartel (for a firm in a cartel), explain
the relationship between price and...
A monopolist faces a downward sloping demand curve, P = 911.0 - 16.5*Q. It has a...
A monopolist faces a downward sloping demand curve, P = 911.0 -
16.5*Q. It has a marginal cost curve described by the equation MC =
17 + 13*Q. The competitive market price is estimated to be ____ and
the monopoly price will be ____.
A) $410.97 ; $590.33
B) $455.5 ; $606.8
C) $590.33 ; $455.5
D) $455.5 ; $606.8
A monopolist faces a downward sloping demand curve, P = 369.0 -
12.5*Q. Total revenue will be maximized at a...
Suppose the firm is a monopolist. It faces a downward-sloping demand curve, P(Q). If it also...
Suppose the firm is a monopolist. It faces a downward-sloping
demand curve, P(Q). If it also has non-negative marginal cost, will
it choose a quantity on the demand curve where the price elasticity
of demand is less than, greater than, or equal to -1? Explain.
Two Hints: First, recall that R(Q) = P(Q) times Q, and that the
price elasticity of demand is defined as .
Second, recall the condition MR = MC. Think about how the firm’s
revenue will...
1.For a linear demand curve that is downward sloping, the marginal revenue curve Select one: a....
1.For a linear demand curve that is downward sloping, the
marginal revenue curve
Select one:
a. will be to the left of the demand curve and twice as
steep.
b. will be to the right of the demand curve and twice as
steep.
c. will be to the left of the demand curve and half as
steep.
d. will be the same as the demand curve.
2.The demand curve that a monopolist faces is:
Select one:
a. not affected by...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its
product:
Q = 200 - 2P MR = 100 - Q TC = 5Q MC = 5
a) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the price...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 ; MR = 100-Q ; TC = 5Q ; MC = 5
a) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing...
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve...
A monopolist faces the following demand curve, marginal revenue,
total cost curve and marginal cost curve for its product: Q = 200 -
2P ; MR = 100 - Q ; TC = 5Q ; MC = 5
a) What level of output maximizes total revenue?. b) What is the
profit maximizing level of output?. c) What is the profit
maximizing price?. d) How much profit does the monopolist earn? e)
Suppose that a tax of $5 for each unit...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 - 2P MR = 100 - Q TC = 5Q MC = 5 a. What is the profit
maximizing level of output? (10 pts.) b. What is the profit
maximizing price? (8 pts.) c. How much profit does the monopolist
earn? (10 pts.)Immersive Reader (28 Points)
If a monopolist faces a linear demand curve, its marginal revenue curve will cross the quantity...
If a monopolist faces a linear demand curve, its marginal
revenue curve will cross the quantity axis at the quantity related
to:
a. MR=MC
b. the point of unit elasticity on demand curve
c. the minimum of average total cost
d. the profit maximizing price
Problem 1: A monopolist faces the following demand curve, marginal revenue curve, total cost curve and...
Problem 1: A monopolist faces the following demand curve,
marginal revenue curve, total cost curve and marginal cost curve
for its product: Market demand function: Q = 200 - 2P (direct form,
which shows Q as a function of P) Market demand function in the
indirect form: P = 100 – 0.5Q (indirect form because it shows P as
a function of Q). Marginal revenue function: MR = 100 – Q (Notice
that the slope of the MR function is...
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