LAST NAME,FIRST NAME MONOPOLY a pure monopoly when: A fini it is the only seller
ID: 1119343 • Letter: L
Question
LAST NAME,FIRST NAME MONOPOLY a pure monopoly when: A fini it is the only seller of is is dhe dering the nar fcom entering the market in thelobrt is the only seller of a product that has rndtuet thar has very few clone salbsiuis nadety e entry prevent other seller narket in the long run is unrestricted. the mara only a few other very large firms selling similar products. in the long c there are c.it can sell all it can produce at any price it chooses. to entry: guarantee that a firm will always earn arante maintained in the long run because other fims will always fiad will always earn positive economic profit. cannot be maintained in the long run b. way to enter a profitable industrye other firms will a ebstacles that make it impossible or unprofitable for new are obstacles that make it impossible or market in the long run. both perfectly competitive and monopoly markets. d. characterize .,-MC = S3 at an output level of 2000 units. If a monopolist produces and Supponits, charging a price of s6 per unit and incurring average total cost of $5 per sells $6,000 b. $4,000 d. $1,000. Price discrimination allows a monopolist to: $2,000 charge each customer the same high price, even though some customers are willing to pay more than others. b. charge those customers with a greater willingness to pay a higher prioe. resulting in higher proft. charge a price for its product that exceeds the cost of producing it. avoid having to make a pricing decision and leave it to government regulators. c. d. the marginal revenue curve lies below the demand curve because any reduction in price applies only to the last unit sold. 5 For a firm with monopoly power that cannot engage in price discrimination: a. the marginal revenue curve lies below the demand curve because the firm e marginal revenue curve lies above the demand curve because the monopoly firm can charge any price it wishes total revenue is a linear function of output because sales are independent of product price. must lower price on all units in order to sell a higher level of output. c. th 1? AssignmentsExplanation / Answer
Q1: Option A
A monopoly charges a higher price produces a lower quantity, and provides limited jobs in the industry due to lower production in comparison to a perfectly competitive firm. This implies that such a monopoly will be able to earn economic profits even in the long run. Pure monopolies have no rival and so no substitutes for products
Q2: Option C
Monopolies conduct research and development, innovation and inventing new products which are then patented and copyrighted. This gives them monopoly power that deters entry of other firms
Q3: Option C
Profit = (6 - 5)*2000 = $2000
Q4: Option B
It allows monopolist to charge higher price from consumers with inelastic demand and higher reservation price to raise profits
Q5: OptionB
To sell more, it has to lower its price.
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