Today, you might be buying from a regulated natural monopoly when you purchase natural gas or electricity Oa computer, a phone, or a camera O a car, a truck, or a bicycle
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- From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly? Justify. Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology requited having a wile matting to every home, it seemed plausible that telephone service had diminishing average costs and might require regulation like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has occurred over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)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?Some years ago. two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market for this case was the market for intercity bus service. Another possible definition was the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.' Which definition do you think the bus companies preferred, and why?
- How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive film?If you lived in a small rural community in Montana, which of the following is most likely to be a monopoly ? A. an appliance store B. a grocery store C. a dentists office D. An electricity providerReview the graph at right for a monopoly market (enter all of your responses as whole numbers). Price 100- 90- MC How much is the consumer surplus? $ 80 70- 160 60- 50- 40- 30 30- 20- 10- MR 40 50 60 Quantity 0- 80 90 tv 80 esc F1 F2 F3 F4 F5 F6 F7 FR 2$ % & 1 4 7 8 Q W E R T Y tab A S つ caps lock C V B ift fn control option command つ エ
- f car at 2. Answer the following questions about the table below: Marginal Revenue Price per unit $85 80 75' 70 65 60 55 Quantity demanded 10 11 12 13 14 15 16 Total revenue ** Total cost c. What is the monopoly's profit? b. What is the monopoly's choice of output and price? nuo vlogonom isban ulque 19 $530 540 550 560 575 595 625 Marginal dost a. Complete the table dowbrob) 21200 vorspilte odteishuolao be werd **An example of a monopoly could be: a. the only veterinary doctor on an island b. a big hospital in a big city c. a big city restaurant d. the hotels in san juan7 Which of the following is most likely a monopoly? A Local fast-food restaurant BO Local bathroom fixtures shop Local television broadcaster DO Local electricity distributor
- What are businesses or industries in the Philippines are examples of monopoly?The figure provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. If Light-U-Up is regulated, what is its economic profit if it must follow a marginal cost pricing rule? A. -$20 B. -$40 OC. $30 D. SO Price (cents per kwh] 324232RLOS 55 45 40 35 30 25 20 15 10 5 0 9 LRAC D 100 200 300 400 500 MC MR Quantity (kilo-watt hours)Exercise 5. You are the manager for a monopoly with costs, demand, and marginal revenueas in the graph at the top on Figure 1.a. Does the fact that you operate in a monopoly always guarantee that you can achievehigher profits by increasing the price? Explain.b. Draw the area representing the profits on the top graph on Figure 1.c. Suppose one of your suppliers just announced an increase in prices for a specific partthat your product requires. What should the impact be to each of the curves on thetop graph of Figure 1? Explain carefully.d. Suppose economic conditions change in such a way that the demand curve for yourcompany shifts left.i. Draw a demand curve on the bottom graph on Figure 1 that leads to zero economicprofits.ii. Draw a demand curve on the bottom graph on Figure 1 such that any furtherleftward demand shift will cause you to shutdown.