Monopoly Sample Questions

Slides:

Advertisements

Similar presentations

Different Types of Market Structures

Advertisements

Copyright © 2008 Pearson Addison-Wesley. All rights reserved. Chapter 10 Monopoly, Cartels, and Price Discrimination.

12 Prepared by: Fernando Quijano and Yvonn Quijano © 2004 Prentice Hall Business PublishingPrinciples of Economics, 7/eKarl Case, Ray Fair Monopoly.

MICROECONOMICS PREPARED BY: Dr. Mohammad Zedan Salem.

Roger LeRoy Miller © 2012 Pearson Addison-Wesley. All rights reserved. Economics Today, Sixteenth Edition Chapter 24: Monopoly.

Market Structure: Perfect Competition and Monopoly Sample Questions

14 Perfect Competition CHAPTER Notes and teaching tips: 4, 7, 8, 9, 25, 26, 27, and 28. To view a full-screen figure during a class, click the red “expand”

Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Monopoly u A monopoly is the sole seller of its product.  its product does not.

Chapter 9 – Profit maximization

Possible Barriers to Entry “a market served by a single firm” 14 Monopoly.

Managerial Economics & Business Strategy

Chapter 10: Perfect competition

12 MONOPOLY CHAPTER.

Profit Maximization and the Decision to Supply

Figure 8.2 How a Competitive Firm Maximizes Profit

The Production Decision of a Monopoly Firm Alternative market structures: perfect competition monopolistic competition oligopoly monopoly.

Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Monopoly u A monopoly is the sole seller of its product.  its product does not.

 relatively small economies of scale  many firms  product differentiation  close but not perfect substitutes  product characteristics, location, services.

Introduction to Monopoly. The Monopolist’s Demand Curve and Marginal Revenue Recall: Optimal output rule: a profit-maximizing firm produces the quantity.

John R. Swinton, Ph.D. Center for Economic Education Georgia College & State University.

Copyright © 2004 South-Western Monopoly vs. Competition While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered.

Price Discrimination Price discrimination is the practice of selling different units of a good or service for different prices. To be able to price discriminate,

13 PART 5 Perfect Competition

AP Microeconomics Warm Up: Why will it be hard for a monopolistic competition firm to sustain profits?

UBEA 1013: ECONOMICS 1 CHAPTER 6: MARKET STRUCTURE: MONOPOLY 6.1 Characteristic 6.2 Short-run Decision: Profit Maximization 6.3 Short-run Decision: Minimizing.

1 Monopoly and Antitrust Policy Chapter IMPERFECT COMPETITION AND MARKET POWER imperfectly competitive industry An industry in which single firms.

10 Monopoly The price of monopoly is upon every occasion the highest which can be got. ADAM SMITH Monopoly The price of monopoly is upon every occasion.

CHAPTER 14 Monopoly PowerPoint® Slides by Can Erbil © 2004 Worth Publishers, all rights reserved.

Monopoly. A firm that is the sole seller of a product No close substitutes Many barriers to entry Sources of market power: – Firm owns a key resource.

Chapter 6: The Role of Profit. Chapter Focus The profit-maximizing rule How businesses in each market structure maximize profits The effects of profit-maximizing.

1 Chapter 11: Monopoly. 2 Monopoly Assumptions: Restricted entry One firm produces a distinct product Implications: A monopolist firm is a ‘price setter,’

Copyright © 2010 Cengage Learning 17 Monopolistic Competition.

November 17, Begin Lesson 3-8: Market Structure #2: Monopoly 2.HW: Activities 3-10 & 3-11.

© 2010 Pearson Addison-Wesley Chapter EightCopyright 2009 Pearson Education, Inc. Publishing as Prentice Hall. 1 Chapter 8-A Pricing and Output Decisions:

Monopolistic Competition CHAPTER 13A. After studying this chapter you will be able to Define and identify monopolistic competition Explain how output.

Copyright © 2011 Cengage Learning 14 Firms in Competitive Markets.

Copyright © 2006 Thomson Learning 15 Monopoly. Figure 1 Economies of Scale as a Cause of Monopoly Copyright © 2004 South-Western Quantity of Output Average.

PPA 723: Managerial Economics Lecture 15: Monopoly The Maxwell School, Syracuse University Professor John Yinger.

Chapter 24 MONOPOLY Maximizing profits The monopolist will always set p=p(y). r(y)=p(y)y The monopolist’s profit-maximization problem then takes.

KRUGMAN'S MICROECONOMICS for AP* Introduction to Monopoly Margaret Ray and David Anderson Micro: Econ: Module.

Chapter 12 Monopoly. Basic Definitions Imperfect Competition: Occurs when firms in a market or industry have some control over the price of their output.

ECON107 Principles of Microeconomics Week 13 DECEMBER w/12/2013 Dr. Mazharul Islam Chapter-12.

MONPOLY. CONDITIONS One Firm High barriers of entry No close substitutes for good the monopoly firm produces.

Review pages Explain what it means to say that the monopolist is a “price maker.” 2. Explain the relationship between output and price for.

1.  exists when a single firm is the sole producer of a product for which there are no close substitutes. 2.

Perfect Competition CHAPTER 11 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Explain a perfectly.

Perfect Competition. Objectives After studying this chapter, you will able to  Define perfect competition  Explain how price and output are determined.

© 2010 Pearson Education Canada Monopoly ECON103 Microeconomics Cheryl Fu.

Monopoly Chapter 7 Copyright © 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.McGraw-Hill/Irwin.

Pure Competition in the Short Run 10 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

CH13 : MONOPOLY CH13 : MONOPOLY Asst. Prof. Dr. Serdar AYAN.

© 2007 Thomson South-Western. Monopolistic Competition Characteristics: –Many sellers –Product differentiation –Free entry and exit –In the long run,

Monopoly, Monopolistic Competition & Oligopoly

CHAPTER 7 MARKET STRUCTURE EQUILIBRIUM

Microeconomics Graphs

AP Microeconomics 2004 Question 3.

© 2007 Thomson South-Western

Pure Competition.

Slide 12 presents the total revenue received by the monopolist.

price quantity Total revenue Marginal revenue Total Cost profit $20 1

Monopolistic Competition

Markets with Market Power

Monopoly (Part 2) Chapter 21.

AP Microeconomics 2004 Question 3.

Firms in Competitive Markets

16 Monopoly CLICKER QUESTIONS Notes and teaching tips: 3, 4, 5, 6, 7, 13, 16, 17, 19, 20,

Presentation transcript:

Monopoly Sample Questions AP Microeconomics Mr. Bordelon

Quantity (Megawatts) Price per Megawatt Total Cost 1 $550 $1,000 2 500 1,075 3 450 1,200 4 400 1,375 5 350 1,600 6 300 1,875 7 250 2,200 8 200 2,575 Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia’s demand and total cost of producing electricity. The price effect of increasing production from 3 to 4 megawatts is: -$150. $500. $450. -$50. -$400.

Quantity (Megawatts) Price per Megawatt Total Cost 1 $550 $1,000 2 500 1,075 3 450 1,200 4 400 1,375 5 350 1,600 6 300 1,875 7 250 2,200 8 200 2,575 Lenoia runs a natural monopoly producing electricity for a small mountain village. The table shows Lenoia’s demand and total cost of producing electricity. The price effect of increasing production from 3 to 4 megawatts is: -$150. $500. $450. -$50. -$400.

Assume there are no fixed costs and AC = MC Assume there are no fixed costs and AC = MC. In the figure, at the profit-maximizing quantity of production for the monopolist, total revenue is _____, total cost is _____, and profit is _____. $600; $200; $400 $1,600; $3,200; $1,600 $4,800; $3,200; $1,600 $4,800; $1,600; $3,200 $1,600; $800; $800

Assume there are no fixed costs and AC = MC Assume there are no fixed costs and AC = MC. In the figure, at the profit-maximizing quantity of production for the monopolist, total revenue is _____, total cost is _____, and profit is _____. $600; $200; $400 $1,600; $3,200; $1,600 $4,800; $3,200; $1,600 $4,800; $1,600; $3,200 $1,600; $800; $800

The profit-maximizing firm in this figure will produce _____ units of output per week. 160 220 250 300

The profit-maximizing firm in this figure will produce _____ units of output per week. 160 220 250 300

This profit-maximizing monopoly firm’s cost per unit at its profit-maximizing quantity is: $8. $15. $16. $18. $35.

This profit-maximizing monopoly firm’s cost per unit at its profit-maximizing quantity is: $8. $15. $16. $18. $35.

This profit-maximizing monopoly firm’s price per unit is: $20. $26. $29. $35. $16.

This profit-maximizing monopoly firm’s price per unit is: $20. $26. $29. $35. $16.

This profit-maximizing monopoly firm’s profit per unit is: $5. $13. $14. $20. $2.

This profit-maximizing monopoly firm’s profit per unit is: $5. $13. $14. $20. $2.

A natural monopoly exists when: a few firms collude to make one large firm. economies of scale provide large cost advantages to having one firm produce the industry’s output. firms naturally maximize profit regardless of market structure. firms enter the industry as a result of profit incentives. government creates a natural barrier to entry for other firms.

A natural monopoly exists when: a few firms collude to make one large firm. economies of scale provide large cost advantages to having one firm produce the industry’s output. firms naturally maximize profit regardless of market structure. firms enter the industry as a result of profit incentives. government creates a natural barrier to entry for other firms.

In the figure, the natural monopoly: would incur an economic profit if regulated to produce where price is less than marginal cost. would incur an economic profit if regulated to charge a price equal to average total cost. creates more consumer surplus if regulated to produce either where price equals marginal cost or price equals average total cost. creates more consumer surplus if regulated to produce where price is above the average total cost. eliminates consumer surplus if regulated to produce where price is above average total cost.

In the figure, the natural monopoly: would incur an economic profit if regulated to produce where price is less than marginal cost. would incur an economic profit if regulated to charge a price equal to average total cost. creates more consumer surplus if regulated to produce either where price equals marginal cost or price equals average total cost. creates more consumer surplus if regulated to produce where price is above the average total cost. eliminates consumer surplus if regulated to produce where price is above average total cost.