Suppose that many similar price-taking consumers have a single good (candy bars). Jane has a monopoly in wood, so she can set prices. Assume that no production is possible. Using an Edgeworth box, illustrate the monopoly optimum and show that it does not lie on the contract curve (that is, it isn't Pareto efficient).
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- The figure shows what type of market? >>Please add an explanation of how natural monopoly differs in graph vs. normal monopoly.Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q. Barbara will produce ✓ units. Barbara will charge a price of Barbara will make a profit of Suppose now the government imposes a tax of 4 dollars on each unit sold. With the tax: Barbara will produce ✓ units. Barbara will receive a price per unit of higher). Barbara will make a profit of In addition to the tax, suppose the government imposes a business levy (a fixed cost) of $500. With this levy: Barbara will produce Barbara will charge a price of Barbara will make a profit of ✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be ✓ units. ✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be higher).Draw an example of a monopoly with a linear demand curve and a constant marginal cost curve. a. Show the profit-maximizing price and output and and identify the areas of consumer surplus, producer surplus, and deadweight loss. Also show the quantity that would be produced if the monopoly were to act like a price taker. b. Now suppose that the demand curve is a smooth concave-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the point Explain why the monopoly equilibrium will be the same as with the linear demand curve. Show how much output the firm would produce if it acted like a price taker. Show how the welfare areas change. c. Repeat the exercises in part b if the demand curve is a smooth convex-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the point
- The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the long run? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.Assignment 7 1. Suppose the government provides a subsidy to the monopoly. Illustrate: (1) consumer surplus; (H) producer surplus; (i) government cost; and (iv) social surplus with the subsidy. P Market dend cune MC wi whity MC wih tdy 2. Consider a market with a monopoly shown in the figure below. Suppose the government provides a subsidy to cosumers that achieves the efficient outcome. Use diagrams to illustrate: (1) consumer surplus; (i) producer surplus; (ii) government cost; and (iv) social surplus with this subsidy. 3. Consider a market with a monopoly. The market demand curve, as well as the monopoly's marginal revenue and marginal cost curves are shown below. The shaded area indicates the producer surplus at the monopoly outcome. Find another area that also represents the producer surplus at the monopoly outcome.
- City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. Assume that builder XYZ is a monopoly in Sydney’s Southwest, who specialises in apartment construction.(a) Draw a diagram to illustrate XYZ making economic profits before the implementation of the hard lockdown in Sydney’s Southwest. On your diagram clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge.(b) Assuming costs remain constant and that that the construction industry is still allowed to operate normally, explain the impact of Sydney’s lockdown on builder XYZ’s demand from Q2 part (a). With the aid of a new diagram, discuss XYZ’s static profit or loss situation after these changes. Clearly indicate the quantity XYZ is choosing to produce and the price XYZ is choosing to charge. (c) Assume that XYZ survives the lockdown and stays in business. If the NSW government decides to double the…The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinationalenterprise that supplies Hi-tech components. Use the graph to answer the questionsthat follow.i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd.iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the long run? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.Suppose Jack and Jill have hair the same length but the local barber charges Jack $2 less because he is a guy to encourage him to use his services. This is an example of... Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b с d Question 1 e 1st Degree Price Discrimination 2nd Degree Price Discrimination 3rd Degree Price Discrimination 4th Degree Price Discrimination Bundling Saved Question 2 Which of the following best describes a natural monopoly? MacBook Pro
- Tad's bait shop has a monopoly on the bait market at Sanderson's Lake. The demand curvefor bait is QD = 36 - 6P. Tad has two employees he can use to search for bait. The marginalcost of using Amanda to search for bait is: MCM (QM) = 0.5??. The marginal cost of usingAndrew to search for bait is: MCN(QN) =QNa. Determine how many units of bait each employee should gather.b. Which employee gathers more and why?c. What is the price Tad receives for selling the bait?Suppose that global dem and for the rabies shots is gi ven by: Q = 36 – 6 * P where Q is the dem and in billions of units. Suppo se further that the firm DOGGO holds a pa tent on the only effective rabies shot. DOGGO’s total cost function (in billi ons of dollars) for produ cing Q shot doses is: C = 5 + 3 * Q Assuming that the patent grants DOGGO a monopoly on the global rabies shots market: How many doses will DOGGO choose to produce? At what price will DOGGO sell its shots?Why does a monopoly arise? O because of diseconomies of scale because entry to an industry is blocked because of elastic demand because firms want to maximize profits