1) Based on the graph below identify the following: The profit maximizing output
ID: 2440586 • Letter: 1
Question
1) Based on the graph below identify the following:
The profit maximizing output is ["6 units", "5 units", "8 units"]
The monopoly price is ["$1,300", "$900", "$1000"]
The total revenue is ["$8,000", "$6,500", "$4,500"]
Total cost is ["$4,200", "$8,104"]
Total profit is ["$2,300", "$300", "-$104"]
The profit maximizing output is ["5 units", "", "4 units", "3 units"]
the price charged by the monopoly is ["$500", "$450", "$400"]
the profit realized is ["$1250", "$1200"]
Oligopoly ( high use of non-price competition to promote rather than fight on price/ high use of non-price competition to help differentiate their products/ high use of non-price competition to collude)
Monopoly ( high use of non-price competition to promote rather than fight on price/ high use of non-price competition to help differentiate their products/ high use of non-price competition to collude)
Perfect Competition ( high use of non-price competition to promote rather than fight on price/ high use of non-price competition to help differentiate their products/ high use of non-price competition to collude)
Monopolistic Competition ( high use of non-price competition to promote rather than fight on price/ high use of non-price competition to help differentiate their products/ high use of non-price competition to collude)
4) In the long run, oligopolies are
(2 correct answers)
A) aless efficient than competitive firms because they do not minimize average total cost
B) as efficient as competitive firms because they minimize average total cost
C) as efficient as competitive firms because they charge prices equal to minimum average total cost
D) less efficient than competitive firms because they do charge higher prices and produce less
5)Firms in Oligopoly market prefer price stability because - check all that apply
they always match price each other price changes
price decreases would tend to be matched by other firms and would lower profits for all
Price increases are risky and could cause firms to loose market share if the others do not match the price increase
they put the consumer's interest above their own
6) Monopolistically competitive markets have the following characteristics:
More than 1 correct answer
price takers
A)differentiated products
B) large number of firms
C) high barriers to entry
D) mutual interdependence
E high use of non-price competition
$1,800 $1,700 $1,600 $1,500 $1,400 $1,300 $1,200 ti $1,100 $1,000 E $900 $800 d $700 $600 S500 $400 $300 $200 $100 S0 1650 105 101 867 83 0 4 6 Quantity Demand - Marginal RevenueMarginal Cost ATCExplanation / Answer
Answer 1 : Profit Maximisation point = MR = MC
Maximum output level = 5 units
Monopoly price has been attained at level where corresponding to the demand curve.
Monopoly price = $1300
Monopoly total revenue = Price * Quantity = $1300*5= $6500
Total cost = ATC* Quantity = $840*5 = $4200
Total profit = Total revenue- Total cost= $6500-$4200= $2300
Answer 2 : Table showing information:
Maximum output level = 5 units of output
Maximum price charged = $450
Maximum profit = $1250
Output Price Revenue Marginal revenue Total cost Marginal cost Profit 0 700 - - 400 - - 1 650 650 650 550 150 100 2 600 1200 550 650 100 550 3 550 1650 450 700 50 950 4 500 2000 350 800 100 1200 5 450 2250 250 1000 200 1250 6 400 2400 150 1350 350 1050 7 350 2450 50 1850 500 600 8 300 2400 -50 2550 700 -150Related Questions
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