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Examine Diagram 2. and fill in the blanks with the letters a - h to identify the

ID: 1112203 • Letter: E

Question

Examine Diagram 2. and fill in the blanks with the letters a - h to identify the correct point or location that corresponds with its correct description. Then explain why that point or location is important. (All letters represent points, except for letters e and h, which represent a rectangle and a triangle, respectively.) (8 points total)

Match the letters a-h with the following descriptions. (Type answers in column to the right.)

What is it's important and/or relevance?

Type your answers in this column.

(1 point each)

a.) Letter _____ on Diagram 2 represents the price that the monopoly will charge its customers for the monopoly quantity of production.

a.

b.) Letter _____ on Diagram 2 is where the monopoly quantity crosses the demand curve.

b.)

c.) Letter _____ on Diagram 2 is the monopoly quantity that the monopoly ideally wants to produce.

c.)

d.) Letter _____ on Diagram 2 is the dollar value of average total cost of producing the monopoly quantity.

d.)

e.) If the business was in a perfectly competitive market, in which it did not have the ability to set prices, then it would produce the quantity _____ on Diagram 2.

e.)

f. ) Letter _____ on Diagram 2 represents the equilibrium point if there were no monopoly and this was a perfectly competitive market.

f.)

g.) Letter _____ on Diagram 2 represents the deadweight loss for the market in which the monopoly now operates.

g.)

h.) Letter _____ on Diagram 2 represents the amount of monopoly profits that the monopoly receives.

h.)

Match the letters a-h with the following descriptions. (Type answers in column to the right.)

What is it's important and/or relevance?

Type your answers in this column.

(1 point each)

a.) Letter _____ on Diagram 2 represents the price that the monopoly will charge its customers for the monopoly quantity of production.

a.

b.) Letter _____ on Diagram 2 is where the monopoly quantity crosses the demand curve.

b.)

c.) Letter _____ on Diagram 2 is the monopoly quantity that the monopoly ideally wants to produce.

c.)

d.) Letter _____ on Diagram 2 is the dollar value of average total cost of producing the monopoly quantity.

d.)

e.) If the business was in a perfectly competitive market, in which it did not have the ability to set prices, then it would produce the quantity _____ on Diagram 2.

e.)

f. ) Letter _____ on Diagram 2 represents the equilibrium point if there were no monopoly and this was a perfectly competitive market.

f.)

g.) Letter _____ on Diagram 2 represents the deadweight loss for the market in which the monopoly now operates.

g.)

h.) Letter _____ on Diagram 2 represents the amount of monopoly profits that the monopoly receives.

h.)

Diagram 2 9 ATC MC MR

Explanation / Answer

a) is the monopoly quantity that the monopoly ideally wants to produce.

It is the equilibrium quantity where monopoly maximizes profit.

b) is where the monopoly quantity crosses the demand curve.

It is equilibrium point where firm maximizes profit by charging price d and sold quantity a.

c) is the dollar value of average total cost of producing the monopoly quantity.

This point represents total cost of firm for providing its optimal quantity. This helps in finding total profit of firm.

d) represents the price that the monopoly will charge its customers for the monopoly quantity of production

It is the optimal price which monopoly firm charges for its good.

e) Represents the amount of monopoly profits that the monopoly receives.

f) If the business was in a perfectly competitive market, in which it did not have the ability to set prices, then it would produce the quantity.

g) represents the equilibrium point if there were no monopoly and this was a perfectly competitive market.

h) represents the deadweight loss for the market in which the monopoly now operates.

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