The figure to the right shows the market demand for electricity and the average total cost and marginal cost of producing Kelectricity for a utility company. Suppose the utility company is a regulated natural monopoly. If government regulators want to achieve economic efficiency, then they will regulate a price of $☐ per kilowatt hour. (Enter a numeric response using a real number rounded to two decimal places.) Now suppose instead that government regulators want to set the lowest price such that the utility company will not suffer a loss so that it will continue to produce in the long run. If so, then government regulators will set a price of $ per kilowatt hour. 0.52 0.48 0.44- 0.40- 0.36- 0.32- 0.28- Price and cost (dollars per kilowatt hour) 0.24- 0.20- 0.16- 0.12- ATC MC D 0.08- 0.04- 0.00- 0 4 8 12 16 20 24 28 32 36 40 44 48 Quantity of kilowatt hours (in billions)

Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit, where the marginal revenue of the 250th unit is $40, the marginal cost of the 250th unit is $50, and the average total cost at 250 units is $60. [Hint: Based on the information given, is the quantity you’re asked to show the profit-maximizing quantity? Think about what has to be true for profit-maximization.] Based on the graph and assuming the firm attempts to profit maximize (and succeeds), what would happen to price, quantity, MR, MC, and ATC?  (rise, fall, or stay the same?)

In British Columbia, Canada a company named after Tim Hortons runs a monopoly on a sweet snack called Timbits! Suppose the demand for Timbits is P=90-Q and the cost function is C-Q How much would the consumer surplus, producer surplus and DWL be in case Tim Hortons a single-price monopoly? Suppose Tim Hortons could install a device in its premises that could immediately 11) predict the willingness to pay of every unsuspecting customer entering its franchise premises and charge them that corresponding amount! Additionally, suppose they could also stop resale of products, and thus become a first degree price discriminatıng monopoly. How much would the consumer surplus, producer surplus and DWL be in this case?

Assume that a monopoly is constrained to charging the same price for each unit it sells, and assumption BIG holds. It faces a demand curve equal to MWTP(Q) = 160 - 0.5Q, and MC(Q) = 60. What is the monopoly's producer surplus if a regulator directs it to sell the efficient quantity? Round to two decimal places, do not include a currency symbol, and enter the negative sign if the answer is negative. If your answer is -$1.275, enter -1.28.

If the inverse demand curve is p=100-Q and the marginal cost is constant at $10, how does charging the monopoly a specific tax of t= $12 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes the tax revenue)? What is the incidence of the tax on consumers? As a result of the tax, the profit-maximizing quantity decreases by 6 units and the profit-maximizing price increases by $6. (Enter numeric responses using real numbers rounded to two decimal places.) Show Transcribed Text Consumer surplus by $ The monopoly's surplus (producer surplus) Finally, society's welfare by $. The consumer incidence of the tax is%. by S.

Suppose a monopoly's price elasticity of demand equals-5 and the marginal cost of production equals $500.00. The profit-maximizing price is $ 625 (Enter a numeric response using a real number rounded to two decimal places.) What will be the firm's markup? When maximizing profit, the monopoly's markup is______percent. (Round your response to the nearest percent.)

Consider the relationship between monopoly pricing and the price elasticity of demand. If demand is inelastic and a monopolist raises its price, quantity would fall by a ▼. Therefore, a monopolist will Use the purple segment (diamond symbols) to indicate the portion of the demand curve that is inelastic. (Hint: The answer is related to the marginal- revenue (MR) curve.) Then use the black point (plus symbol) to show the quantity and price that maximizes total revenue (TR). Price 10 9 CO 7 6 S E 2 0 -2 Demand Search percentage than the rise in price, causing profit to produce a quantity at which the demand curve is elastic. Marginal Revenue 86 Inelastic Demand e + Max TR C ? (CC Speaker/Headph A

To answer this question, you will want to work out the answer using a graph on a piece of scratch paper (not turned in). You are going to compare the outcomes in the case where there is perfect competition to the monopoly case. So, as an intermediate step, you will need to compute the equilibrium outcomes under competition and monopoly. Suppose that you have the following information about the demand for oil. Price ($/barrel) 80 70 60 50 40 30 20 10 Suppose that the marginal cost to produce a barrel of oil is $20. What is the deadweight loss if the oil market is a monopoly? Quantity demanded(# barrels) 5 6 7 8 9 10 11 12

A monopoly producer of drugs has a constant marginal cost of MC=8 and sells its product in two separated markets. The demand functions for the two separated markets are:• Market 1: P1=24-Q1 and • Market 2: P2=12-0.5Q2 i. Determine the firm’s profit-maximizing quantity and price in each market. Calculate the size of deadweight loss in each market and the total welfare loss caused by the monopoly. Illustrate the two separated market equilibria including the sizes of welfare loss with two monopoly market diagrams. ii. Calculate the size of monopoly profit or loss for each market. Based on the information provided, analyse the most critical reason that causes the monopoly to set prices differently in these two markets. iii. A new law was enacted that prohibits the monopoly from charging different prices in separated markets. With this new single-price law the monopoly is restricted to set only one single price no matter how many separated markets in which it monopolies. The board of…

A monopoly producer of drugs has a constant marginal cost of MC=8 and sells its product in two separated markets. The demand functions for the two separated markets are:• Market 1: P1=24-Q1 and • Market 2: P2=12-0.5Q2 i. Determine the firm’s profit-maximizing quantity and price in each market. Calculate the size of deadweight loss in each market and the total welfare loss caused by the monopoly. Illustrate the two separated market equilibria including the sizes of welfare loss with two monopoly market diagrams. ii. Calculate the size of monopoly profit or loss for each market. Based on the information provided, analyse the most critical reason that causes the monopoly to set prices differently in these two markets. iii. A new law was enacted that prohibits the monopoly from charging different prices in separated markets. With this new single-price law the monopoly is restricted to set only one single price no matter how many separated markets in which it monopolies. The board of…