šŸ·ļø LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION ā†’
Log in
Economics
1
answer
0
watching
113
views

Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

A) The output of the monopolist will be too large and the price too high.
B) The output of the monopolist will be too large and the price too low.
C) The output of the monopolist will be too small and the price too high.
D) The output of the monopolist will be too small and the price too low.

Watch
1
answer
0
watching
113
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

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

Which of the following is TRUE?

Select one:

a. Monopoly results in a higher quantity of output being sold compared with perfect competition.

b. Price discrimination occurs when there are differences in prices that reflect differences in marginal cost.

c. Charging all customers the same price when costs vary can actually be a case of price discrimination.

d. Price discrimination guarantees that the monopolist will make a profit.

Ā 

Ā 

Which of the following statements is TRUE?

Select one:

a. At the monopolist's equilibrium, resources are being efficiently allocated.

b. With a monopoly, the value to society of the last unit produced is less than it's production cost.

c. Monopolists raise the price and restrict production, compared to a competitive situation.

d. A monopolist always produces a higher level of output than would be produced if the market were competitive.

1. A monopoly firm is different from a competitive firm in that:
A. There are many substitutes for the monopolist's product, whereas there are no close substitutes for the competitive firm's product
B. The monopolist's demand curve is perfectly inelastic, whereas the competitive firm's demand curve is perfectly elastic
C. The monopolist is a price-maker, whereas the competitive firm is a price-taker
D. The monopolist always earns economic profits in the long run, whereas the competitive firm never earns economic profits in the long run

2. In the long run, an entrepreneur managing a perfectly competitive firm will earn:
A. Zero normal profits B. Economic profits and normal profits
C. The opportunity cost of operating the firm D. Negative economic profits

3. Refer to the graph above. The maximum possible total profit this monopolist can earn per day is:
A. $0 B. $1800 C. $2400 D. $4200

4. If marginal cost exceeds marginal revenue, the firm

A. is most likely to be at a profit-maximizing level of output.

B. should increase the level of production to maximize its profit.

C. must be experiencing losses.

D. may still be earning a profit.

5. A perfectly competitive firm maximizes profit by producing 500 units of output

Suppose that a monopolist farm's demand curve is given by p=210-4y and it faces a constant marginal cost of $10. Answer the following questions:

a) what is the profit maximization output for this monopolist? how much total revenue does it earn at this profit maximization level of the output?

b) Suppose that the marginal cost increases to $20. How does total revenue change?

c) Now consider a perfectly competitive industry with a constant marginal cost of $10 for each rm. Find the optimal level of market output and the corresponding price in this industry.

d) Suppose that the marginal cost of each rm in this perfectly competitive industry increases to $20. How does total industry revenue change?

e) Compare and discuss your answers to parts (b) and (d).

Weekly leaderboard

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