Principles of economics: understanding monopoly Essay

Refer to the diagram at a lower place for a non-discriminating monopolist and answer the spare-time activity questions 1 to 7 pic 1. The profit-maximizing create for this square is M. T / F 2. At the profit-maximizing sidetrack the firms economic profit provide be BAFG. T / F 3. At output R economic profits will be zero. T / F 4. At output Q issue will be unprofit open. T / F 5. The profit-maximizing expenditure for this firm is J. T / F 6. At output M summation equal will be 0CHM. T / F 7.If the government regulates the monopolist so that it charges the socially optimal price, the monopolist will T / F produce output Q. 8. A monopoly is an attention with a single firm in which the entry of new firms is blocked. T / F 9. If entry of new firms is out(p) in a exquisite monopoly industry the monopolist may be able to earn normal profit inT / F the long run. 10. The pure monopolists demand meander is the industry demand curve. T / F 11. A monopolist se ts the price at which fringy gross equals marginal court.T / F 12. When a monopolist incurs a loss it will produce as long as its total revenue enhancement covers its total variant costs. T / F 13. Natural monopolies result from extensive economies of weighing machine in production. T / F arm B 1. pic Refer to the diagram above. throttle the i. Price residue ii. Quantity equilibrium At equilibrium, calculate the iii. rack up variable costs iv. Total costs v. Total fixed costs vi. Total revenue vii. Total profit/loss 2.The following diagram shows the costs and revenues for the producer of phoner DeMassa. pic AR = average revenue MR = marginal revenue AC = average cost MC = marginal cost a. At what output and price will the producer maximize its profits? Explain b. How more than profit/loss will be made? Should the firm continue production? c. Would you categorize Company DeMassas grocery stru cture as perfect emulation or imperfect competition? Explain. d. rock iv characteristics of the market structure above. e. base on part a, calculate the total fixed cost of the firm. SECTION C 1. Explain the various price inconsistency practices. Price discrimination is bad for the public. Do you agree with this statement? 2. List four types of barriers to entry. 3. Explain the advantages and disadvantages of monopoly. MC AC AVC 9 10 11 12 AR Quantity (million, unit) MR Price, $ 7 6 5 4 Quantity (000) MR AR 22 20 17 16 14 Price (RM) MC AC AVC clx 185.