Week 12 Homework

CDB

Consumer surplus under conditions of monopoly in the figure above is

DGE

In the figure above a change from perfect competition to monopoly means a loss for society of the area

the area of 0P1B.

In the figure above, producer surplus for the perfectly competitive market is

Q3

Refer to Figure 15-4. If the monopoly firm wants to maximize its profit, it should operate at a level of output equal to

total revenue is maximized.

For a monopoly, the level of output at which marginal revenue equals zero is also the level of output at which

$70

A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's profit?

$200

Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing quantity is 40 units, the profit-maximizing price is $160, and the marginal cost of the 40th unit is $120. If the good were produced in a perfectly competitive market, the equilibrium quantity would be 50, and the equilibrium price would be $150. The demand curve and marginal cost curves are linear. What is the value of the deadweight loss created by the monopolist?

lie entirely below the average total cost curve.

Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm must

Panel B represents the demand curve for a perfectly competitive firm. And Panel A represents The typical demand curve for a monopoly. And Panel A represents the typical demand curve for a perfectly competitive market. So it's All of the above are correct. ✅

Refer to Figure 15-3. Which of the following statements is correct?

P5

Refer to Figure 15-4. Profit will be maximized by charging a price equal to

(P2-P5) X Q3

Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

P5 X Q3

Refer to Figure 15-5. A profit-maximizing monopoly's total cost is equal to

$112

Refer to Table 15-1. If the monopolist sells eight units of its product, how much total revenue will it receive from the sale?

40 units

Scenario 15-4: Suppose a monopolist has a demand curve that can be expressed as P = 90 - Q. The monopolist's marginal revenue curve can be expressed as MR = 90 - 2Q. The monopolist has constant marginal costs and average total costs of $10. Refer to Scenario 15-4. The profit-maximizing monopolist will produce an output level of

The monopolist is currently maximizing profits, and its total profits are $250.

Supposed when a monopolist produces 50 units its average revenue is $8 per unit, its marginal revenue is $4 per unit, its marginal cost is $4 per unit, and its average total cost is $3 per unit. What can we conclude about this monopolist?

6 units

Table 15-18: A monopolist faces the following demand curve: Suppose marginal cost is constant at $8 per unit. Refer to Table 15-18. Suppose the firm depicted in the table is selling a prescription drug for which it had a patent, but the patent has expired. As new firms enter the market and sell the generic version of this drug competitively, what quantity will be sold?

$20

Table 15-3: Consider the following demand and cost information for a monopoly. Refer to Table 15-3. To maximize profit, the monopolist sets price at

4 units

Table 15-5: A monopolist faces the following demand curve: Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing level of production?

$11

Table 15-6: A monopolist faces the following demand curve: Refer to Table 15-6. Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced. What is the total profit if she operates at her profit-maximizing price?

$18

Table 15-8: The following table provides information on the price, quantity, and average total cost for a monopoly. Refer to Table 15-8. At what price will the monopolist maximize his profit? (find the corresponding price to the output level where MC<=MR)