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- The graph below shows the Market conditions of Honey’s Laundry service, which is the only laundry in Banani Residential Area. Considering the shop as a Monopoly market, answer the following questions: (a)In order to maximize profit, how many clothes does the shop clean ? (b)If the opening of five new laundry turns it into a perfectly competitive market, what should be the price Sunny’s laundry be charging now? (c)Compute the change in total revenue between part a and part b.A substantial increase in buying power is a contemporary marketing phenomenom that has to be contended with marketes. Using a sector of your choice, explain how you will manage the situation.You are the manager of a monopoly, and your analysts have estimated your demand and cost functionsas P = 300 − 3Q and C(Q) = 2, 000 + 2Q2, respectively.(a) What price-quantity combination maximizes your firm’s profits?(b) Calculate the maximum profits.(c) Is demand elastic, inelastic, or unit elastic at the profit maximizing price-quantity combination?(d) What price-quantity combination maximizes revenue?(e) Calculate the maximum revenues.(f) Is demand elastic, inelastic, or unit elastic at the revenue maximizing price-quantity combination?
- Show the relationship between AR, MR, TR and the price elasticity of demand under imperfect competitionssume there is no price discrimination: Matthew, Rachel, Janice, and Mandy own the only ice company in town (they have a monopoly on the ice market). Matthew wants to sell as much ice as possible without losing money. Rachel wants the ice company to bring in as much revenue as possible. Janice wants to maximize total surplus and Many wants to make the largest possible profit. Use ONE clearly-labelled graph of the ice company’s marginal revenue, demand, and cost curves to show the price and quantity (i.e., ice) each person desires. Provide explanation.Onestore has monopoly power in Smalltown. Assume that Onestore is a profit maximizing firm and currently operates at a negative economic profit in the short run.(a) Draw a correctly labelled diagram for Onestore and show each of the following:(i) The profit maximizing price and quantity labelled as Pm and Qm respectively (ii) Shade completely, the area representing the negative economic profit (b) Explain why Onestore continues to operate in the short run despite earning negative economic profit in the short run. c. A single price monopolist’s demand curve is given by:P = 240 – 3qand its total cost curve is given byTC = 30 + 6q Calculate the monopolist’s profit maximizing level of output Calculate the profit maximizing price for the monopolist What is the profit of the monopolist?
- How many shuts do you recommend selling per color per day? What then is your recommended dollar markup and markup percentage? What dollar margin and percentage margin is that?Describe the concept of price elasticity! Why it is for a monopoly less profitable to act inmarkets with high price elasticity? What can a monopolist or a firm with market power do, inorder to increase the profits?QUESTION 6 Economies of scale are achieved by producing larger quantities Oproducing smaller quantities producing in a country with a larger economy. Obecoming a monopoly
- You own Athleticon, which manufactures athletic wear. Your new contract with Atlanta United, a professional soccer team, allows Athleticon to be the sole suppler of athletic wear with the “Atlanta United” logo. No one lese can manufacture athletic wear with the “Atlanta United” logo. What do you think will be Athleticon’s level of profitability on the sale of “Atlanta United” athletic wear? Explain why. Your contract with Atlanta United only lasts 3 years. It was not renewed. Other firms can now manufacture athletic wear with the “Atlanta United” logo It is now 5 years after your contract with Atlanta United was terminated. Any manufacturer that wants to can manufacture and sell athletic wear with the “Atlanta United” logo. What do you think will be the level of profitability and rate of return on manufacturing athletic wear with the “Atlanta United” logo? Explain why.A graph of a monopoly is shown. The initial position of the cost curves do not accurately represent their true relationship. First, move point E to indicate the monopoly's loss-minimizing price and quantity. Then, shift the average total cost (ATC) curve and average variable cost (AVC) curve to show the monopoly operating at a loss. Finally, position the loss box to indicate the monopoly's total loss. Price E MR ATC MC AVC D LossA topic on optimal pricing, elasticity, stay-even analysis, or cost-based pricing.
