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- Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?1. Explain, in your own words, why granting a monopoly the right to price discriminate might increase total welfare. 2. Describe a situation in your life that could be represents as a game with 3 or more players, each of which has 2 or more actions. Write down the players, actors, and plausible payoffs for this game and find a Nash equilibrium.1. When a monopoly advertises, the goal is to _____ because _____. Group of answer choices increase its demand as a share of market demand; the monopoly faces a significant portion of market demand increase market demand; the monopoly faces the entire market demand increase market demand; the monopoly produces a product that is identical to the output of all other sellers in the market increase its demand as a share of market demand; the monopoly faces a small portion of market demand 2. If given a choice, a person would prefer to experience the situation of which of the following families? Group of answer choices a family with income equal to the world poverty line a family with income equal to the United States poverty line a family with income double the world poverty line a family with income equal to the poverty line in the United States in 1970 3. A business using its bargaining power as a major buyer of labor to pay lower prices, including lower wages,…
- 6. Why might a monopolist advertise heavily for its product even though it isn't competing with any firm for market share?follow. Table 13.1 Price (S) Quantity 4.00 2000 3.50 2400 3.00 2800 2.50 3200 2.00 3600 1.50 4000 1.00 4400 Refer to Table 13.1. If a monopoly faces the demand schedule given in the table, what is its marginal revenue from the 2400th unit it sells? A) $3.75 B) $1 C) $3.50 OD) $4002. How monopoly generates profit? Explain with the help of equation and graphs?
- 18. What does it mean when a company is a monopoly? Hard to join the market, usually only one company that controls prices within the market. What is this? Monopoly is just a board game? I always win. Companies are exempt from government regulations or assistance. Companies do not have to pay federal taxes when it comes to tax season.1. Draw a graph of a typical natural monopoly with declining costs. a. Label monopoly price and quantity. Identify the area of deadweight loss when the monopoly chooses the profit-maximizing level of output. b. Label marginal cost price and quantity. i. How will the area of deadweight loss be impacted with marginal cost pricing? ii. What are the drawbacks to this approach? c. Label fair return price and quantity. What are the pros and cons of fair return pricing? d. What is incentive regulation? What are the positive and negative impacts of this strategy?Which one the following statements is correct? A. In a subgame perfect Nash equilibrium of the infinitely repeated Bertrand duopoly game, the outcome is either the Bertrand paradox or like a monopoly. B. The Bertrand Paradox outcome cannot be supported by a subgame perfect Nash equilibrium of the infinitely repeated Bertrand duopoly game. C. The Bertrand Paradox outcome can be supported by a subgame perfect Nash equilibrium of the infinitely repeated Bertrand duopoly game. D. None of the other three statements is correct.
- 3. Profit Maximization with Limited Information. Joe Holiday is a monopoly provider of Fishing Reels in a remote fishing village on a barrier island off the Gulf Coast. Currently he is selling is BassMaster reels for $50 each. Joe doesn't know the precise demand function for fishing reels, but he estimates price elasticity of demand to be -2. If the reels cost Joe $30 each, is he maximizing profits? If not, what would be the profit maximizing price? Is $50 a profit maximizing price? Y/N (circle one) Profit Maximizing Price9. Suppose a firm is collecting $100 in total revenues when it sells 10 units and it receives $110 in total revenues when it sells 11 units. The firm is a(n) A) pure monopolist. B) oligopolist. C) monopolistic competitor. 10. Which of the following circumstances does not involve game theory? A) A local gas station owner wondering how his competition across the street will react to his decision to lower prices. D) monopsonist. E) perfect competitor. B) Negotiating a salary when two firms have made offers. C) Deciding whether to have an extramarital affair. D) Firm behavior in a perfectly competitive market. E) Playing poker. 11. Implicit costs A) are always fixed. B) appear in the calculation of accounting profits. C) measure the forgone opportunities of the owners of the business. D) always exceed explicit costs. E) are irrelevant to business decisions. 12. Suppose all firms in a perfectly competitive industry are experiencing economic profits. One can hypothesize that A) market supply…56.Assume that an oligopoly's four enterprises are forming a pact to cooperate. How might the ease of entry into their industry influence how much they charge?