Firms that benefit from economies of scale: a. Performs more efficiently when output is small. b. Would not be considered natural monopolies because MC = MR c. Prefer to operate under marginal cost pricing. d. Face declining marginal cost
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Firms that benefit from economies of scale:
a. Performs more efficiently when output is small.
b. Would not be considered natural
c. Prefer to operate under marginal cost pricing.
d. Face declining marginal cost
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- Market Structure a. In the short run, if a perfectly competitive firm produced at the quantity of productive efficiency, would it generate the highest profit level possible? Why or why not? b. Draw a graph to represent a natural monopoly and describe the circumstances that would permit natural monopoly to exist. Would it be wise for government to break up natural monopolies? Give some examples of natural monopoliesBased on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.a. The perfectly competitive firm exhibits resource allocative efficiency (P = MC), but the single-price monopolist does not. What is the reason for this difference?b. Explain three reasons why monopolies arise. c. Why is the marginal revenue of a perfectly competitive firm equal to the market price? d. Would a perfectly competitive firm produce if price were less than theminimum level of average variable cost? Why?
- Suppose a perfectly competitive industry turns into a monopoly but the cost structures remain the same. What are the welfare implications of this change? Katakan industri persaingan sempurna beralih menjadi monopoli tetapi struktur kosnya adalah tetap sama. Apakah implikasi kebajikan daripada perubahan ini? a. Producer surplus increase, consumer surplus decrease, and welfare gain occurs. Lebihan pengeluar meningkat, lebihan pengguna berkurangan, dan keuntungan kebajikan berlaku. b. Producer surplus decrease, consumer surplus increase, and welfare gain occurs. Lebihan pengeluar berkurangan, lebihan pengguna meningkat, dan keuntungan kebajikan berlaku. c. Producer surplus increase, consumer surplus decrease, and welfare loss occurs. Lebihan pengeluar meningkat, lebihan pengguna berkurangan, dan kerugian kebajikan berlaku. d. Producer surplus decrease, consumer surplus increase, and welfare loss occurs.Your business, which has some market power, has the following demand (D), marginal revenue (MR), marginal cost (MC), and average cost (AC) curves. Move point E to label the profit-maximizing price and quantity for your firm. If the goal of your business is to maximize profit, how much will it produce, and what price will it charge? -The business will exit the market because it is unable to cover its average costs. -The business will produce 40 units, and charge a price of $5. -The business will produce 30 units, and charge a price of $3. -The business will produce 30 units, and charge a price of $6.Under monopolistic competition, firms produce________ a: products that are somewhat differentiated. b: a unique product without close substitutes. c: It depends on the individual firm. d: identical products
- What are the major assumptions of the theory of imperfect competition. Please explain them in detailand graphically show the monopoly profit.Firm A takes action to make there production process more efficient. Why will this make it easier for Firm A to compete better with competitors who are discount firms.Network Externalities A. Explain why switching costs fall as the size of a network increases B. Are the service industry equivalent of natural monopolies in good producing industries C are more important in the short run than in the long run D help explain why monopolies often do not last very long E can explain the dominance of existing firms in some industries
- A perfectly competitive firm is considered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. a. Demonstrate a simplified graph to show that a perfectly competitive firm incurring loss, but has reached the minimum condition to keep operating in the market. b. Does the firm operate in the short or long run based on your answer to question (a). Why?A perfectly competitive firm is onsidered to be more generous in terms of price and quantity of output in comparison to firm belonged to monopoly and monopolistic markets. C. If firms incurring loss in this market begin to exit the market, what will happen to the market equilibrium? Demonstrate your answer using a simplified graph. d. The firm wishes to supply output more than the quantity determined under the equilibrium condition, is it worth to pursue?compare and contrast the monopoly and perfect competition in market structure in long run?