1. How many firms are present in the textbook version of the market structure ca
ID: 1109094 • Letter: 1
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1. How many firms are present in the textbook version of the market structure called "monopoly"? 2. A S4 monopolist knows that it is facing a downward sloping demand curve. For example, presently it charges per u would nit of output and sells 9 units of output per day, It knows that if it wants to sell 10 units per day, it have to lower the price to $3.80 per unit. Given the information provided, what is the marginal revenue of the 10 unit? a) 20 cents. b) $2. c) $3.80 d) $4. e) None of the above. 3. The graph on the right shows demand and average and marginal costs for a monopolistic producer. If the bold line represents the demand curve, then which of the following is the marginal revenue (MR) curve? a) A b) B c) C d) the demand curve itself is the MR curve. 5 10 1 30 4. The online lecture dealt mainly with the types and examples of barriers preventing other firms from entering the market occupied by the monopolist. For each product or company name listed below, indicate the type of barrier it represents. In doing so, use the following shorthand notation: NE - Network Externalities BR- Brand name and reputation PR - Property rights for a resource G- Exclusive rights granted by the Apple Microsoft Office De Beers Westar ALCOA government 5. When compared to a perfectly competitive industry with identical costs of production, a monopolist will charge a higher price and produce more output. higher price and produce less output. lower price and produce more output. a) c) d) lower price and produce less outputExplanation / Answer
1. In the text book version of the market structure, there exists a single firm in the market. A monopolist has no other competitor in the market and hence, enjoys the entire market share until new firms enter into the market.
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