Please see the attached file.
Consider the following monopoly that produces paperback books:
Fixed Costs = $1,000 Marginal Costs = $1 (and is constant)
A) Draw the average total cost curve and the marginal cost curve on the same graph.
B) Assume that all households have the same demand schedule, given by the following relationship:
0 2.5 5.0
If there are 400 households in the economy, draw the market demand curve and the marginal revenue schedule facing the monopolist?
C) What is the monopolist's profit-maximizing output? What is the monopolist's price?
D) What is the "efficient price", assuming no externalities?
E) Suppose the government "imposed" the efficient price by setting a ceiling on price at the efficient level. What is the long-run output of the monopoly?
The solution answers the question below.
Effects of monopolies on society are noted.
Details: There are many different types of monopolies which exist within the market. you are going to talk about the different kind of monopolies, their place in the market, and their effect on society. please discuss the following:
- Define a monopoly.
- Find two examples of monopolies and they cannot be the same type of monopoly (no choosing two government monopolies for example).
- Briefly describe what makes your examples a monopoly.
- How did they become a monopoly?
- What effect does that monopoly have on the market?
- What effect does that monopoly have on society, if any?