Show mathematically that a monopolist always sets its price above marginal cost.

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Rahul Sunny answered 1 year ago

QUESTION 8 For a monopolist: price equals average total cost. price is above marginal revenue. marginal...

QUESTION 8 For a monopolist: price equals average total cost. price is above marginal revenue. marginal revenue equals zero. marginal cost equals zero. QUESTION 9 An example of price discrimination is the price charged for: an economics textbook sold at a campus bookstore. gasoline. theater tickets that offer lower prices for seniors. a postage stamp. QUESTION 10 There is only one gas station within hundreds of miles. The owner finds that if she charges $3 a gallon, she sells 199...

2 a.) Draw the demand, marginal revenue and marginal cost curve for a monopolist. Show the...

2 a.) Draw the demand, marginal revenue and marginal cost curve for a monopolist. Show the equilibrium price and quantity supplied and total profit. Show the equilibrium price and quantity supplied and total profit. b.) Suppose new policy suggest the government can imposed a tax on monopolists equal to 25 percent of their economic profits, how this affect the output level of the firm? How about the price? Explain.

For a monopolist: Price is greater than marginal revenue. Marginal revenue equals zero. Marginal cost equals...

For a monopolist: Price is greater than marginal revenue. Marginal revenue equals zero. Marginal cost equals zero. Average total cost equals marginal cost.

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 monopolist with a constant marginal cost of production of 10 maximizes its profit by choosing...

A monopolist with a constant marginal cost of production of 10 maximizes its profit by choosing to produce where the price elasticity of demand is –3. (Recall that MR = p(1 + 1/ε) where MR is marginal revenue, p is price and ε is the point price elasticity of demand.) A. If price is decreased (from its profit maximizing level) by a small amount, revenue of the monopolist will increase. B. If the monopolist’s fixed cost increases, its profit maximizing...

1..A pure monopolist will maximize profits by producing at that output where price and marginal cost...

1..A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal. A)True B)False 2..In the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to: A)average total cost. B)marginal revenue. C)average variable cost. D)average cost. 3..Which is not true for a monopolistically competitive industry? A).Firms tend to operate with excess capacity. B). Each firm faces a downward-sloping demand curve. C). These firms earn zero...

In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.

7) T/F In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.8) T/F The limited liability of stockholders in the corporate business structure makes it harder to raise equity capital.9) T/F In the year 2008, nearly three out of four business firms in the United States were organized as proprietorships.10) T/F When demand is relatively price inelastic, price and total revenue will change in the same direction.11) T/F As...

Why is it mathematically correct that the Marginal Cost curve crosses the average total cost curve...

Why is it mathematically correct that the Marginal Cost curve crosses the average total cost curve at its lowest point? Show your work using graphs

A monopolist in Ba can produce at constant marginal cost of MC = 10. The monopolist...

A monopolist in Ba can produce at constant marginal cost of MC = 10. The monopolist faces a market demand curve given by Q = 50 - P. You can assume that average cost is same as marginal cost. a) Calculate the profit-maximizing price-quantity combination for the monopolist. b) Compute the monopolist’s profits and consumer surplus. c) What output level would be produced by this industry under perfect competition? d) Calculate the consumer surplus obtained by consumers under perfect competition....

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...

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