Price monopoly and consumers

Related BrainMass Solutions

• Monopoly theory

  321703 Monopoly theory - Since a monopoly is the only source of supply, consumers are entirely at its mercy. There is no limit to the price the monopoly can charge?. Evaluate this statement.

• Perfectly Competitive, Monopoly

  See the figure, the consumers' surplus when the market is perfectly competitive is the area of the triangle below the demand curve and the price level (P=ATC=50). Thus, the area A+B is the consumers' surplus.

• Why monopolies occur, and why they are undesirable

  If you've gone over the concepts of consumers and producers surplus, welfare is measured as the sum of consumers surplus and producers surplus.

• Monopoly Price-Output Decision

  Monopoly Price-Output Decision

• Price change

  When a monopoly sets its price, it faces a downward sloping demand curve. If the company lowers price, it will attract more consumer.

• Social Welfare Long Term Outcomes

  However, monopoly will charge at higher price based on demand at B. With output G and price B, the monopoly profit is the rectangle BCED. This is also a producer surplus. The area of the triangle ABC is the consumer surplus.

• Price Ceilings/Discrimination

  45067 Price Ceilings/Discriminations 1. Consider a price ceiling imposed on a monopoly that is set below the competitive price. Design a diagram showing the monopoly equilibrium in this case.

• Optimal markups and prices

  The solution contains the determination optimal markups and prices under third-degree price discrimination using elasticity of demand and marginal cost.

• Lerner-Index, price elasticity, profit

  What is the price elasticity at the monopoly price and output? 2) What is the Lerner-Index of Market Power for this monopoly at this price and output? 3) What would the competitive market price and output be for this example?

• deadweight loss of monopoly

  Dead weight loss occurs as the monopoly producer produces at a lower quantity and charges a higher price from the consumers. Thus, monopoly is producing at a level lower than the pareto-optimal point and hence deadweight loss.