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- Classify the following as a government-enforced barrier to entry, a banker to entry that is not government enforced, or a situation that does not involve a barrier to entry. A City passes a law on how many licenses it will issue for taxicabs A city passes a law that all taxicab drivers must pass a driving safety test and have insurance A well-known trademark Owning a spring that offers very pure water An industry where economies of scale are very large compared to the size of demand in the marketIf Congress reduced the period of patent protection from 20 years to 10 years, what would likely happen to the amount of private research and development?Explain natural monopoly in case of public production of private goods.
- Explain natural monopoly in case of public production of private goods. Also draw the graph with its interpretation.E3 A monopolist faces market demand Q = 500 - 10 P, and has a marginal cost curve equal to MC = Q/10 - 10. I have computed the marginal revenue curve fro you which is given by MR = 50 - Q/5. If the firm is a single price monopolist, find the profit maximizing price and quantity and the resulting profit to the monopoly.What is the socially optimal price and quantity? What is the firm's profit at this price and quantity?Show (1) and (2) on a graph.Calculate consumer surplus (CS) and producer surplus (PS) and total surplus for parts (1) and (2). Show CS, PS, and DWL on the graph. Calculate the DWL due to monopoly.If the firm engages in first degree price discrimination, find the profit maximizing quantity and the resulting profit to the monopoly.Between (1) and (5), which pricing scheme is preferred by the monopolist and which by the consumers? why?T/F There are alot of firms (seller) in a monopoly market. Justify in detail.
- Assume integer quantities. The firm is a monopoly. The table below shows the demand schedule it faces, as well as its marginal cost of production. The production of the good creates a marginal external benefit equal to $19. 1 3 5 MWTP $35 $29 $24 $18 $11 $6 $1 MC $2.50 $3.50 $6.50 $8.50 $13.50 If the monopoly engages in perfect first-degree price discrimination, what is the marginal $10.50 $12.50 revenue of unit number 2? Round to two decimal places and do not enter the currency symbol. If your answer is $1.125, enter 1.13.Explain the economic case for social regulation that is based upon externalities. What is the meaning attached to market failure in this context?Figure 15-8 B G ATC MC MR D J K QUANTITY Refer to Figure 15-8. What is the socially efficient price and quantity for this natural monopolist? F and K D and J A and J H and L PRICE
- warten population manghe ecosystem's Carrying capacity? 6. We have the following data for Demand Price and Costs for our product. Quantity Demand Price Costs 300 100 $21.63 $35.35 $5040.00 $2347.67 500 $17.25 $7481.67 1000 $12.70 $12469.67 1500 $10.26 $16196.00 We have reason to believe that the Demand Price is a power (exponential) function of some kind. Our Cost function is close to linear, but we expect, from some market analysis, that it is in fact quadratic. Approximate this data with a Demand Price function and a Cost function. Explain how confident you are; that is, how much error do you think is reasonable in this type of scenario? 区Problem 3 uppose an airline has monopoly over a certain route. The estimated price elasticity of demand for business travelers is E-12, while the price elasticity of demand for leisure travelers is Ey-24. The airline wants to set the prices separately for business and vacation travelers. Economy Firat Class Only i the marginal cost of transporting each passenger is the same, und the airline is able to separate the two groups perfoctly, what is the optimal surcharge (in ) on business travelers? Oor example. fleiture travelers pay 100, and business ravelers pay 200, then the surcharge is 100%) Anvwer b) Suppose that in order to separste business travelen, the airline must offer them slightly better conditions on board (for enample, serve them a meal). As a resul, the marginal cost of flying a basiness traveler is 30% higher than for a leivare traveler. What is the optimal surcharge (in ) on business fravelers in this case? Awwer Now suppose the airline introdaces a Basi Economy fare,…Which of these is a negative production externality? An airline manufacturer must hold up production of a plane at great cost due to delays in its global supply chain. A cereal manufacturer suffers losses due to a drought and unexpected increases in market prices of grains that it uses in its cereals. O Consumers complain to the wrong regulators about price gouging in gasoline markets. A producer of lead for batteries that are used nationwide emits noxious gases in its factory town and local people are getting sick. Thch Save
