Question

2) Demand and Marginal Revenue a) Explain why a single price monopolist faces a downward sloping...

2) Demand and Marginal Revenue

a) Explain why a single price monopolist faces a downward sloping demand and why their downward sloping demand results in P>MR.

b) Explain why a 1) Perfectly competitive market and 2) Perfect (first degree) price discriminating monopolist determines their demand curve, in general compare their demands, and despite their difference in demand why P=MR for both.

c) For a member of a cartel (for a firm in a cartel), explain the relationship between price and marginal revenue before they form a cartel and after they form a cartel. (Hint: why do cartels also have a quota for each member?)

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Show the mathematical argument that for a monopolist who faces a downward-sloping demand curve, marginal revenue...
Show the mathematical argument that for a monopolist who faces a downward-sloping demand curve, marginal revenue is less than price whenever quantity sold is positive.
Why is the marginal revenue curve downward sloping for monopolist? a.Consumers are more price elastic for...
Why is the marginal revenue curve downward sloping for monopolist? a.Consumers are more price elastic for goods sold by monopolists b.A monopoly faces high barriers to entry c.Consumers will bid down marginal revenue in monopolistic markets d.A monopoly must lower price on all units to sell an additional unit
“A competitive firm faces a horizontal demand curve and monopolist faces a downward-sloping demand curve” do...
“A competitive firm faces a horizontal demand curve and monopolist faces a downward-sloping demand curve” do you agree with this statement? explain your reasoning
When a monopolist faces a downward sloping linear demand curve for its product, total revenue is...
When a monopolist faces a downward sloping linear demand curve for its product, total revenue is maximized when the monopolist produces on the midpoint of the demand curve (unit elastic point). Under what conditions, if ever, would a profit maximizing, single-price monopolist choose to produce at this point of the demand curve?
5. The marginal revenue curve for a monopolist is greater than the price because the monopolist...
5. The marginal revenue curve for a monopolist is greater than the price because the monopolist faces a downward sloping demand curve for its product. True or False? 8. In a competitive industry, barriers to entry prevent new suppliers from entering the market. True or False? 9. Economies of scale occur when the long-run average cost curve slopes downward. True or False? 11. If a market changes from perfectly competitive to monopolistic, output will increase and the price will decrease,...
1Suppose the firm is a monopolist. It faces a downward-sloping demand curve, P(Q). If it also...
1Suppose the firm is a monopolist. It faces a downward-sloping demand curve, P(Q). If it also has non-negative marginal cost, will it choose a quantity on the demand curve where the price elasticity of demand is less than, greater than, or equal to -1? Explain. 2. Now, consider what will happen if a firm has exactly one competitor in the market. Both firms have identical technologies and cost structures (assuming a constant marginal cost may be helpful), and each chooses...
29. A monopolist faces a downward sloping demand curve, P = 461.0 - 13.5*Q. The maximum...
29. A monopolist faces a downward sloping demand curve, P = 461.0 - 13.5*Q. The maximum total revenue will be ____. A) $3935.57 B) $461.0 C) $691.5 D) $922.0 30. If the price in a competitive market is $30, and the demand curve is given by the equation P = 90 - 3Q, then the consumer surplus will be ____. A) $1,000 B) $1,200 C) $600 D) $300 31. The short-run supply curve of a firm in perfect competition is...
Assume that a monopolist has MC=20 and and no fixed costs; the monopolist faces a downward...
Assume that a monopolist has MC=20 and and no fixed costs; the monopolist faces a downward sloping demand curve of P=100-4Q. Calculate the deadweight loss (DWL). B) Why is there no deadweight loss in the equilibrium of a perfectly discriminating monopolist? Consider the scenario below: Two firms are merging into a larger company and must select a computer system for daily use. In the past, the players have used different systems I and A; each firm prefers the system it...
(30 Marks) Suppose a market is characterized by inverse demand P = 15,000-5Q. The marginal revenue...
Suppose a market is characterized by inverse demand P = 15,000-5Q. The marginal revenue curve associated with this market is MR=15,000-10Q. Marginal cost is constant at MC=40. A) Solve for the equilibrium price and quantity if the market is characterized by perfect competition. B) Solve for the equilibrium price and quantity if the market is characterized by a monopoly. C) Explain why total surplus is maximized under perfect competition (absent government intervention, externalities, etc.), but it is not maximized under...
1) Suppose that a single price monopolist faces a linear, downward sloping demand curve and a...
1) Suppose that a single price monopolist faces a linear, downward sloping demand curve and a total cost curve that includes the following data points: Price Quantity Total Revenue 8 0 7 1 6 2 5 3 4 4 3 5 2 6 1 7 0 8 Quantity Total Cost 0 2 1 4 2 6 3 8 4 10 5 12 6 14 7 16 8 18 a. What is the profit maximizing condition for a monopolist? In order...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT