Answer the following questions, which relate to measures of concentration: a. What is the meaning of a four-firm concentration ratio of 60 percent? 90 percent? What are the shortcomings of concentration ratios as measure of monopoly power? b. Suppose that the five firms in industry A have annual sales of 30, 30, 20, 10 and
1. (Last Word) How was De Beers able to control the world price of diamonds over the past several decades even though it produced only 50% of the diamonds? What factors ended its monopoly? What is its new strategy for earning economic profit, rather than just normal profit?
Airlines will charge different rates to different people for the same flight. Why would they do this confusing thing? Are monopolies good or bad things to have? McConnell, C. R., and Brue, S. L. (2005). Microeconomics: principles, problems, and policies. (16th Edition). Irwin-McGraw-Hill. Chapter 11 & Chapter 12.
What is the welfare loss for society due to a monopoly?
The local widget monopolist is retiring. He owns the only machine that produces widgets. He offers to sell the widget machine to you for $52,500. After you purchase the machine you can produce as many widgets as you want at no additional cost. You know that the long run demand for widgets is as follows: P = 600 - 2Q where
Please answer the questions below and give full explanations so I can follow and learn how to apply myelf. 1. You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C(Q) = 30 + 3Q2. a. What is the profit-maximizing output for your firm? b. W
(see chart in attached file) The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on every gallon of antifreeze sold. In the figure, how would I illustrate the effect that the tax has on the market for antifreeze? How do I find out and what is the equilibri
1. Assume the industry demand for a product is: P = 1,000 - 20Q. Assume that the marginal cost of a product is $10 per unit. a. What price and output will occur under pure competition? b. What price and output will occur under pure monopoly ( assume one price is charged to all customers )?
An industry is composed of Firm 1, which controls 70 percent of the market, Firm 2 with 15 percent of the market, and Firm 3 with 5 percent of the market. About 20 firms of approximately equal size divide the remaining 10 percent of the market. Calculate the Herfindahl-Hirschman Index before and after the merger of Firm 2 and Fi
Select whether each of the following statements is True or False and explain why. Do not forget to give an explanation of why. 1. When a single seller is confronted in a market by many small buyers, monopsony power enables the buyers to obtain lower prices than those that would prevail in a competitive markets. 2. A nat
Explain the difference between a monopoly and an oligopoly, the welfare effects of monopoly, cost advantages that create monopolies, government actions that create monopolies, and government actions that reduce market power. SBC and ATT are planning to merge. Is tthis an monopoly or oligopoly and what actions, if any, do yo
A monopoly has two production plants with cost functions C1 = 50 + 0.1 Q12 and C2 = 30 + 0.05 Q22. The demand it faces is Q=500 - 10P. What is the profit maximizing level of output? a. Q1 = 62.5; Q2 = 125 b. Q1 = 125; Q2 = 62.5 c. Q1 = Q2 = 125 d. Q1 = Q2 = 62.5
(See attached file for full problem description with diagrams) --- 1. Suppose the Chicago Cubs could rent out Wrigley Field (the field the players play on) to local youth leagues for $11,000 per month. The $11,000 per month reflects the ______ of capital. A) implicit cost B) explicit cost C) direct cost D) total cost
Looking at the attached file, the diagram shows the demand, marginal revenue, and marginal cost of a monopolist. a. Determine the profit-maximum output and input? b. What price and output would prevail if this firm's product was sold by price-taking firms in a perfectly competitive market? c. Calculate the dead weight loss
Assume Boeing Inc. (of the United States) and Airbus Industrie (of Europe) rival for monopoly profits in the Canadian aircraft market. Suppose the two firms face identical cost and demand conditions, as seen in attached file. 1. Referring to attached graph, assume that Boeing is the first to enter the Canadian market. Without
Several of you have mentioned that monoplies arise from economies of scale: a particularly interesting issue is the concept of Minimum Efficiency Scale (MES). Are monoplies necessarily bad? In what cases are monopolies necessarily evils that are preferable to wasteful competition? The AT&T situation until its 1984 break-up,
Please help with the following problem. Provide step by step calculations for each. The following information about a monopoly is given: Demand: Q = 40-2P(Q) Average cost: AC(Q) = Q Marginal Cost: MC(Q) = 2(Q) (a) Derive the marginal revenue equation (b) Find the quantity at which
The patented drug, Botox, is currently sold by Allergan, Inc. The current price for a vial of Botox, is $400, and the marginal cost to produce a vial is $25. a) Using the Lerner index, find the price elasticity of demand for Botox and interpret what this value means to total revenue if the price of Botox were increased one p
OTA Comments: I need 3 pieces of information. 1) You are missing a crucial piece of information and that is the market price or marginal revenue. 2) You have what appears to be a demand fxn. I don't know if it is a market or firm demand function though. Your cost fxn. is fine for this type of problem. Ple
Offers answers for the following multi-choice questions. Internalizing an externality refers to making a. buyers and sellers take into account the external effects of their actions. b. certain that all market transaction benefits go to only buyers and sellers. c. certain government does not disrupt
Why does a monopolist have the best chance of making a long run economic profit? What about the monopolistic cost structure make them candidates for a long-run economic profit?
Industry structure is often measured by computing the Four-Firm Concentration Ratio....What does your adjustment process imply about the CR for the industry? (See attachment for full questions)
Subject: Assistance with econ questions Details: Industry structure is often measured by computing the Four-Firm Concentration Ratio. Suppose you have an industry with 20 firms and the CR is 30%. How would you describe this industry? Suppose the demand for the product rises and pushes up the price for the good. What long-run a
A profit-maximizing monopolist finds that at the present level of output, marginal revenue equals $10 and marginal cost is $14. The price for this output has been determined from the demand curve. What action should the monopolist take to increase profits? a. reduce price and increase output b. reduce price and output c
See attached for question
TR=$15Q-$).000005Q2(squared) MR=dTR/dQ=$15=$0.00001Q Marginal costs for production and distribution are stable at$5per unit. Calculate output, price and profits at profit-maximizing level. What record price and profit levels would prevail following expiration of copyright protection based on the assumption that perfectly comp
What is a bilateral monopoly?