Log in
Economics
3
answers
0
watching
24
views
24 Aug 2019

A monopoly, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopoly decrease its price if it wants to increase its output? Explain.

Watch
3
answers
0
watching
24
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
8 Apr 2022
Already have an account? Log in
Share
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

A) Suppose the lawn-mowing industry approximates a perfectly competitive industry. Suppose also that a single firm buys all the assets of the lawn-mowing firms and establishes a monopoly. Contrast these two market structures with respect to price, output, and allocation of resources. Would you expect the monopoly to survive? Explain.

B) The Best Computer Company just developed a new computer chip, on which it immediately acquires a patent, and becomes monopoly producer/seller. Show and explain what happens to consumer surplus, producer surplus and the deadweight loss (DWL) if the firm goes from a single price monopoly to perfect price discrimination.

(kindly provide drawn graph as reference)

A firm with market power faces the demand function q=4000-40p. The firm's total cost function is TC(q)=10q+.001q^2+1000.

a. If the firm behaves as a single price monopoly, identify the firm's optional price and output level.

b. Demonstrate that the single price monopolist's profit maximizing choice of price and output also maximizes producer surpulus.

c. Identify the output level that would maximize total surplus.

d. Identify the output level that a perfect price discriminating monopolist would produce.

1. A price-discriminating monopoly

sells a larger quantity than it would if it were a single-price monopoly.

is illegal.

cannot offer discounts.

cannot control the price of its product.

makes a smaller economic profit than it would if it were a single-price monopoly.

2. Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the price consumers pay for food

does not change, that is, it remains constant.

falls.

rises.

might rise or fall depending on whether the demand for food is elastic or inelastic.

might rise or fall depending on whether the monopoly's marginal revenue curve lies above or below its demand curve.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in