Suppose the monopolist has chosen to produce a quantity such that the marginal revenue equals $2. If the monopolist is a profit maximizer, we know that the marginal cost equals $ and the price is $ per unit.
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- The demand curve for a monopolist's product is shown. The point UD is the point along the curve where price elasticity of demand is unitary. With this information, use the straight-line tool to draw the marginal revenue curve, stretching from one axis to the other. To refer to the graphing tutorial for this question type, please click here. 4 0 Price (5) 1000 1500 1400 1300 1200 1100 1000 900 400 7:00 600 500 13 OF 15-QUESTIONS COMPLETED N Qadd See Hint SUBMIT ANSWERQuestion 5: Jimmy has a room that overlooks, from some distance, a major league baseball stadium. He decides to rent a telescope for $50 a week and charge his friends and classmates to use it to peep at the game for 30 seconds. He can act as a monopolist for renting out "peeps". For each person who takes a 30 second peep, it costs Jimmy $.20 to clean the eyepiece. Jimmy believes he has the following demand for his service: Price of a Peep $1.20 Quantity of peeps demanded 1.00 90 100 150 200 250 300 70 60 50 350 40 30 400 450 20 10 500 550 a) For each price, calculate the total revenue from selling peeps and themarginal revenue per peep. Price Quantity TR MR $1.20 100 90 100 150 200 70 250 60 300 350 50 40 30 400 450 20 500 10 550 b) At what quantity will Jimmy's profit be maximized? What price will he charge? What will his total profit be? c) Jimmy's landlady complains about all the visitors coming into the building and tells Jimmy to stop selling peeps. Jimmy discovers, though, if he…The table shows the demand schedule of a monopolist. Calculate marginal revenue and fill in the revenue column in the table Assume that output can only be sold in integer amounts (i.e., 1 unit, 2 units, etc.). Once you have filled in marginal revenue identify the quantity produced by the monopolist in this market Not all numbers in the answer bank will be used. Quantity Price Marginal revenue Marginal cost Answer Bank 1 $13 2 $2 $12 $6 $8 $4 $13 $11 $3 $10 $9 $7 $5 4 $10 $4 $3 $2 $12 $5 $9 6 $8 $6 How many units does the monopolist produce? units
- The table shows the demand schedule of a monopolist. Calculate marginal revenue and fill in the revenue column in the table. Assume that output can only be sold in integer amounts (i.e., 11 unit, 22 units, etc.). Once you have filled in marginal revenue, identify the quantity produced by the monopolist in this market. Quantity Price Marginal Marginal Cost Revenue 1 $13 $3 MR1 2 $12 $4 MR2 3 $11 $5 MR3 4 $10 $6 MR4 $9 $7 MR5 6. $8 $8 MR6 How many units does the monopolist produce? Quantity:Use the following graph of a monopoly market to answer this question: P $13 $10 150 300 Which of the following statements is an accurate interpretation of the graph? This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 150 are willing to pay exactly $10. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 150 consumers willing to pay between $10 and $13. This firm engages in price discrimination by negotiating on price with each of its customers. This firm price-discriminates by selling its product for $13 to the 150 consumers willing to pay at least $13, and selling it for $10 to the 300 consumers willing to pay between $10 and $13. This firm engages in perfect price discrimination; 150 of its customers are willing to pay exactly $13, and 300 are willing to pay exactly $10.The following diagram provides demand and cost curves for a product supplied by a natural monopoly. Use the information in the graph to answer the questions below. P ($ per week) 20 15 10 5 7.5 2 D 10 15 6.5 18 20 AFC-ATL-AVC-35-2= 1.5 F=AFC • Q=1.,5x/6.5=24.75 1. This natural monopolist has fixed costs of F = $24.75 0 TR = 1/2 x 18 × 20 = 185 P-ML-24. 0 5 25 30 2 D ATC R=(P-ATC) &Q=(2-35)×18=-27 2. A monopoly that charges a single, profit maximizing price, will earn a profit of π = -27 TC=MCQ = 2x 18 =36. PC=TR²-² TC = 18³-36=144 3. A perfect price discriminating monopoly will earn a profit of π = /44 If the monopolist introduces a two-part tariff, the profit maximizing strategy would be to charge an access fee of M = $ 62 and a user-fee of P = $ per unit. 5. With a profit maximizing two-part tariff, the monopolist would earn a profit of л = $ 6. If the government were to impose a price regulation that capped price at marginal cost, the optimal output strategy of the firm would be Q=…
- Asked Dec 16, 2019 a monopolist finds the demand curve to be linear. with data points (q,p) on that line of being (100,125) and (20,165). How maqny items can he sell if the price is p=90? What price should she charge to maximize revenue?The following graph shows the demand (D) for cable services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local cable company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The cable company is experiencing economies of scale. The cable company must own a scarce resource. The cable company is experiencing diseconomies of scale. True or False: Without government regulation, natural monopolies never earn zero profit in the long run. True FalseIn Karachi Nuplex Cinema has a monopoly on the rights to show movies throughout the city. The monopolist knows the price elasticities of demand for movies by children and adults which are 4 and 0.22 respectively. Suppose the monopolist can charge different prices for the children and adults. Explain why the monopolist can charge different prices. Explain for whom shall the monopolist charge higher prices and why. Draw graph to support your answer.
- The following graph shows the demand (D) for cable services in the imaginary town of Utilityburg. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local cable company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist.Use the graph below to find the monopolists equilibrium quantity and price. 40 26.67 MC ATC 20 13.33 33.33 66.67 100 50 MR Textbools per week What is this monopolists profit maximizing quantity? Simply select the correct quantity from the dropdown box. I Select] What price will the monopolist charge to maximize profits? Simply select the correct number from the dropdown box. [Select ]In the following table, which contains the demand schedule for a monopolist, enter the total revenue (TR) and marginal revenue (MR) for each price. For each price–quantity combination (that is, table row), indicate whether demand is elastic, unitary elastic, or inelastic at that point on the demand curve. Hint: Do not calculate the price elasticity of demand mathematically. Instead, use what you know about elasticity along different segments of a linear demand curve to determine the elasticity of each price–quantity combination.