The monopolistic semiconductor producer TSMC's total cost function is given by TC = 2Q + 10, where Q is the quantity of its exclusive Al semiconductor. If the market demand for the semiconductor is P = Q+20 where P is the price, what is the deadweight loss of monopoly? ○ 47 ○ 44.5 ○ 44 ○ 40.5 ○ 38.5
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- How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?Draw the demand curve, marginal revenue, and marginal cost curves from Figure 9.6, and identify the quantity of output the monopoly wishes to supply and the price it will charge. Suppose demand for the monopolys product increases dramatically. Draw the new demand me. What happens to the marginal revenue as a result of the increase in demand? What happens to the marginal cost curve? Identify the new profit-maximizing quantity and price. Does the answer make sense to you? Figure 9.6 Illustrating Profits at the HealthPill Monolpoly
- • From information about the computer firm XYZ activity as a monopoly on the market, give the conclusion about profit-maximizing choice and the size of the profit in this point. • Also comment the zero-profit point if the fixed costs are equal to 850 Q 1 2 3 4 5 6 7 8 TC Price 1500 1200 1800 1100 2200 1000 2800 900 3500 800 4300 700 5600 600 7400 500What had Alcoa done that made the judge find it guilty of being a monopoly? a. Alcoa had used predatory pricing to keep new firms out of its marketb. Alcoa had engaged in price fixingc. Alcoa had never tried to monopolize the aluminum market, but its policy of building capacity to meet future demand had the effect of giving it a large market share that made it a de facto monopolyd. Alcoa had used tying contracts to drive rivals out of the markete. Alcoa had used price discrimination to acquire a monopoly Following its near bankruptcy in 1922, General Motors pioneered the decentralized management structure in which the firm was reorganized into semi-independent profit centers. Vice-presidents were appointed to manage these profit centers and were told that their bonuses would depend on the profitability of their division. This reorganization was designed to a. reduce management costsb. better capture economies of scalec. create a ratchet effect that would drive managers to perform…Monsanto holds significant regional monopoly power-in some regions they are a true monopoly being the only seller of agriculture seeds. If the elasticities of demand, JEDI, for soybean seeds is 3.5, and 3 for corn, then the profit-maximizing price (relative to marginal cost) for soybeans is times marginal cost, and the price is times marginal cost for corn. Round to one decimal if needed. A Moving to another question will save this response. « >
- Over a recent family dinner, your Aunt Trudy expresses her disdain for price discriminating monopoly businesses, to which you, having taken some economics reply, "A perfect price discriminating monopoly may convert all of the consumer surplus to monopoly profit, but at least it produces O A. more output than a competitive industry would produce. OB. the same output that a competitive industry would produce. C. at the minimum of its average total cost (ATC) curve. D. where its marginal cost (MC) curve is still declining.Price and cost MO 120 Township is a small, isolated community served by one newspaper that can meet the market demand at a lower cost than two or more newspapers could. The Township Gazette is the only source of news. The graph shows the marginal cost of printing the Township Gazette and the market demand for it. The Township Gazette is a profit-maximizing, single-price monopoly. What is the efficient number of copies of the Township Gazette and what is the price at which the efficient number of copies could be sold? 100- The efficient number of copies of the Township Gazette is and the price at which this number could be sold is cents a copy. GALLE 80- 60- 40- 20- D 04 0 100 200 300 400 500 Quantity (newspapers per day) 600 52.5 The following diagram illustrates the demand curve facing a monopoly in an industry with no economies or disecono- mies of scale and no fixed costs. In the short and long run, MC ATC. Copy the diagram and indicate the following: $ nd MC = ATC te Output, Q a. Optimal output b. Optimal price c. Total revenue d. Total cost e. Total monopoly profits f. Total "excess burden" or "welfare costs" of the monopoly (briefly explain)
- Exercise 5. You are the manager for a monopoly with costs, demand, and marginal revenueas in the graph at the top on Figure 1.a. Does the fact that you operate in a monopoly always guarantee that you can achievehigher profits by increasing the price? Explain.b. Draw the area representing the profits on the top graph on Figure 1.c. Suppose one of your suppliers just announced an increase in prices for a specific partthat your product requires. What should the impact be to each of the curves on thetop graph of Figure 1? Explain carefully.d. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.ii. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.The figure above shows a natural monopoly. If it were regulated by Marginal Cost (MC) pricing, then it would incur: Group of answer choices Losses shown by the area FEHG Losses of shown by the area FIJG Profits shown by the area FIJG Profits shown by the area FEHGHotAir Balloon Rides is a single-price monopoly. The table gives the demand schedule for balloon rides (columns 1 and 2) and HotAir's total cost schedule (columns 2 and 3). Now suppose that the government places a fixed tax of $40,000 a month on HotAir. What is HotAir's new profit-maximizing output, price, and economic profit? >>> Remember that the amounts in the table are given in thousands of dollars. When HotAir is producing its new profit-maximizing output, the number of rides it produces is a month. >>> Answer to 1 decimal place. Price (thousands of dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) O 12345 0 Total cost (thousands of dollars per month) 25 150 285 430 585 750