ECON 111 Lecture 10: Chapter 10

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21 Apr 2016

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Businesses are price makers in this situation because of monopoly. Control on price is achieved by manipulating quantity produced. Based on the following market demand, calculate tr, mr, & ar of a monopoli. Tr = p x q mr = change in tr/ change. When tr is increasing, mr > 0 (positive) When tr is decreasing, mr < 0 (negative. Monopolist will only produce in the elastic region of demand. Differentiated or unique product, or product with no close substitutes. Only one firm has access to an important resource in production. Per unit cost (atc) decreases causing a increase in output. Producing marked quantity by one firm is lot cheaper compared to a product being produced by 2 or more firms. Firm engages in certain strategies t block entry of new firms w w. Produce quantity where marginal revenue s equ to zero. Produce a quantity where mr == mc (mr>=mc. Monopoly price is not equal to marginal cost.

Related Questions

Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether the demand is elastic, unit elastistic or inelastic. Using the data from the demand schedule,graph the demand curve, the marginal revenue curve and the total revenue curve. Identify the elastic, unit elastic and inelastic segments along the demand curve.

Price(P)	Quantitiy demanded (Q)	Total Renenue (TR)	Marginal Revenue (MR)	Price elasticity of demand
5	0
4.5	1
4	2
3.5	3
3	4
2.5	5
2	6
1.5	7
1	8
0.5	9
0	10

lavendermule614

Consider the following market demand schedule and total costs for a monopoly.

Q	P	TR	TC	MR	MC	Profit
0	45		4
1	40		9
2	35		19
3	30		39
4	25		61
5	20		91
6	15		130
7	10		172

a) Fill in the blanks.

b) How is the relationship between price and MR different between monopolistic and perfectly competitive markets?

c) Would the demand curve facing a monopolistic competitive market be more or less elastic than the demand curve facing a monopolist, why? Do firms in a monopolistically competitive market make long-run economic profits, why or why not?

crimsongnu281

The table below presents the demand schedule and marginal costs facing a monopolist producer.

Q	P($)	TR($)	MR($)	MC($)
0	8			-
1	7			1
2	6			2
3	5			3
4	4			4
5	3			5
6	2			6
7	1			7
8	0			8

Instructions: Round your answers to the nearest whole number and include a negative sign if appropriate. Leave no cells blank. Enter 0 if appropriate.

a. Fill in the total revenue and marginal revenue columns.

b. What is the profit-maximizing level of output?

c. What price will the monopolist charge for the quantity in part (b)?

whiteoyster220

ECON 111 Lecture 10: Chapter 10

ECON 111 Full Course Notes

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