Exam 10: Monopoly

The following graph gives cost and revenue data for a monopolist: -Refer to the above graph to answer this question. If the monopolist is unregulated and is maximizing its total revenue, what will be the resulting total profit or loss?

The following table shows the demand facing an unregulated monopolist: Quantity Price 1 \ 70 2 65 3 60 4 55 5 50 6 45 7 40 8 35 9 30 10 25 -Refer to the above information to answer this question. At what level of output is total revenue at a maximum and what is the value of total revenue at that output?

The table below shows the costs and demand for the Primrose Oil industry. Quantity Price Total Cost 0 \ 86 \ 40 1 82 70 2 78 90 3 74 120 4 70 160 5 66 210 6 62 272 7 58 348 8 54 440 a) If this were a perfectly competitive industry, what would be the price, output and total industry profit? b) If, alternately, this were a monopoly industry, what would the price, output, and total profit? Hint: Calculate [TR; MR; MC]

Based on the graph above, the monopoly firm maximizes profit, how much is the producer surplus is how much?

A socially optimum price is a price set equal to a firm's marginal cost.

-Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At the profit maximizing price and output, what will be the level of total profit?

Table 10.5, which is data for a monopolist. -Refer to Table 10.5 to answer this question. What would be the output and price if this firm was an unregulated, profit-maximizing firm?

How many years of protection are granted to patents newly registered in Canada?

"A monopolist can charge whatever price it wishes because it is the only firm in the market, therefore it will set the highest price it can charge." Evaluate this statement.

Under what circumstances will a profit-maximizing monopolist be forced to shut down?

If the marginal cost of the 1000^th unit produced by a monopolist is $16 and its marginal revenue is $20, what should the monopolist do?

Using the diagram below compare the monopoly price and quantity (label them P_M and Q_M, respectively) to the perfectly competitive price and quantity (label them P_C and Q_C, respectively).

Suppose a monopolist can divide its market into two segments and it is able to practice price discrimination. If the two segments do not have the same price elasticity of demand, will the monopolist charge a higher or lower price in the market where the demand is relatively more inelastic?

-Refer to the graph above. Areas C and D represent:

-Where is a monopolist's profit maximized?

Assuming that average costs are the same in both circumstances, all of the following statements except one are true regarding the long-run comparison between monopoly and perfect competition. Which is the exception?

-Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At what price and output would the monopolist maximize its total revenue?

The following table gives the cost and demand data for a monopolist: $\begin{array} { l c c c c } \text { Output } & \text { Price (\$) } & \begin{array} { c } \text { Marginal } \\\text { Revenue \$ }\end{array} & \begin{array} { c } \text { Average } \\\text { Costs \$ }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Costs \$ }\end{array} \\0 & & & & \\1 & 100 & 100 & 138 & 100 \\2 & 95 & 90 & 109& 80 \\3 & 90 & 80& 86&40 \\4 & 85 & 70 & 82 & 70 \\5 & 80 & 60 & 80 & 72 \\6 & 75 & 50 & 79.2 & 75 \\7 & 70 & 40 & 80& 85\\8&65&30&82&96\end{array}$ -Refer to the above information to answer this question. Suppose that the monopolist is regulated and forced to charge a socially optimum price. What will be the level of profit or loss?

-Refer to Figure 10.11 to answer this question. Suppose this graph depicts a perfectly competitive industry. What will be the equilibrium price and output respectively?

All of the following except one are necessary conditions in order for price discrimination to be practiced. Which is the exception?