Consider the table below: Q MC TR MR AR-P 0 0 0 10 1 900 900 1200 1200 $1200 2 1600 700 2100 SKOO 1050 3 2100 500 2700 600 900 4 2400 300 3000 300 750 5 3000 600 3000 0 600 6 4200 700 2700 How much will this monopolist produce and how much profit will he earn? a) He will produce 5 units and earn zero profits. b) He will produce 2 units and earn profits of $500. c) He will produce 4 units and earn $600. d) None of the above.

Consider the table below: Q MC TR MR AR-P 0 0 0 10 1 900 900 1200 1200 $1200 2 1600 700 2100 SKOO 1050 3 2100 500 2700 600 900 4 2400 300 3000 300 750 5 3000 600 3000 0 600 6 4200 700 2700 How much will this monopolist produce and how much profit will he earn? a) He will produce 5 units and earn zero profits. b) He will produce 2 units and earn profits of $500. c) He will produce 4 units and earn $600. d) None of the above.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 30CTQ: If a monopoly firm is earning profits, how much would you expect these profits to be diminished by...

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Similar questions

What is the usual shape of a marginal revenue cuwe for a monopolist? Why?
What is the usual shape of a total revenue curve for a monopolist? Why?
How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
How does the demand curve perceived by a monopolist compare with the market demand curve?
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?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
What is a legal monopoly?
Why are urban areas willing to subsidize urban transit systems? Does the argument for subsidies make sense to you?
Is a monopolist allocatively efficient? Why or why not?
In the middle of the twentieth century, major U.S. cities had multiple competing city bus companies. Today, there is usually only one and it runs as a subsidized, regulated monopoly. What do you suppose caused the change?
If public utilities are a natural monopoly, what would be the danger in deregulating them?
If a monopoly firm is earning profits, how much would you expect these profits to be diminished by entry in the long run?