New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
microeconomics
Microeconomics Private And Public Choice 11th Edition James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson - Solutions
=+c. Indicate the monopolist's output level, and label it Q.
=+b. Indicate the price that a profit-maximizing mo- nopolist would charge, and label it P.
=+a. Explain why the industry is likely to be monopo- lized.
=+ 15. The diagram shows demand and long-run cost con- ditions in an industry.
=+ What is your maximum weekly profit?
=+ What output should you pro- duce?
=+c. Given your demand and cost estimates, what price should you charge if you want to maximize your weekly profit?
=+what should you do if you want to maxi- mize profits?
=+b. Assuming you are currently charging $55 per table set,
=+a. Fill in the missing revenue and cost schedules.
=+ 14. Suppose that you produce and sell children's tables in a local market. Past experience enables you to es- timate your demand and marginal cost schedules. This information is presented in the table at the bot- tom of this page.
=+ What regulated price will it set so that Gouge-em makes only a normal rate of return on its investment?
=+b. Now suppose the Backwater County Public Util- ity Commission has the data and believes that ca- ble subscription rates in the county are too expen- sive and that Gouge-em's profits are unfairly high.
=+a. What price will Gouge-em charge for its cable services? What are its profits at this price?
=+fixed costs total $640,000monthly. The marginal cost of adding an- other subscriber to its system is constant at $2 per month. Gouge-em's demand curve can be deter- mined from the data in the accompanying table.
=+13. Gouge-em Cable Company is the only cable televi- sion service company licensed to operate in Back- water County. Most of its costs are access fees and maintenance expenses. These
=+12. "My uncle just bought 1,000 shares of Microsoft, one of the largest and most profitable companies in the United States. Given Microsoft's high profit rate, he will make a bundle from this purchase." Evaluate this statement. Is it necessarily true? Ex- plain. *
=+Do you think the U.S. economy is more or less competitive today than it was 100 years ago? Explain. *
=+What impact do lower transportation costs have on the market power of individual producers?
=+11. Historically, the real cost of transporting both goods and people has declined substantially.
=+ How can game theory help us understand the decisions made by oligopolists? *
=+ Other times licenses are automatically granted to anyone wanting to operate a taxi.
=+9. In large cities, taxi fares are often set above the mar- ket equilibrium rate. Sometimes the number of li- censes is limited in order to maintain the above- market price.
=+8. Why is oligopolistic collusion more difficult when there is product variation than when the products of all firms are identical?
=+ Are competitive pressures pres- ent in markets with high barriers to entry? Discuss. *
=+ What are some of the factors that complicate the regulatory function?
=+Does economic theory suggest that a regulatory agency will in fact follow a proper regulation policy?
=+ 5. Does economic theory indicate that an ideal regula- tory agency that forces a monopolist to charge a price equal to either marginal or average total cost will im- prove economic efficiency? Explain.
=+Compare the price and output policy of a purely competitive industry with the policy that would be established by a profit-maximizing monopolist or trade associa- tion. Who benefits and who is hurt by the formation of the monopoly?
=+4. The retail liquor industry is potentially a competi- tive industry. However, the liquor retailers of a southern state, with the cooperation of the state leg- islature, organized a trade association that sets prices for all firms. For all practical purposes, a competitive industry became a
=+3. Do monopolists charge the highest prices for which they can sell their products?
=+2. "Monopoly is good for producers but bad for con- sumers. The gains of the former offset the losses of the latter. On balance, there is no reason to think that monopoly is bad for the economy." Is this state- ment true? Why or why not? *
=+*1. "Barriers to entry are crucial to the existence of long-run profits, but they cannot guarantee the exis- tence of profits." Evaluate.
=+ a Will competition keep large firms in check in markets that have high barriers to entry?
=+When are oligopolists likely to collude?
=+ Does monopoly guarantee the ability to make a profit?
Challenge Question: Recall the relationship be- tween elasticity of demand, price changes, and their impact on total revenues. As Rod lowers his price from 9,000to9,000to5,000, his total revenues keep increasing. Is demand in this price range elastic, inelastic, or unit elastic?
=+ Can you guess what might happen at prices below $4,000? Explain.
=+ When Rod lowers his price from $5,000 to $4,000, his total revenues stay the same. Is demand in this price range elas- tic, inelastic, or unit elastic?
=+h. Challenge Question: Recall the relationship be- tween elasticity of demand, price changes, and their impact on total revenues. As Rod lowers his price from $9,000 to $5,000, his total revenues keep increasing. Is demand in this price range elastic, inelastic, or unit elastic?
=+What will happen to the profitability of the boat dealers in the future once the entry/exit has occurred?
=+ Will more boat dealers open in the area, or will some of the existing ones go out of business?
=+g. If Rod's profits are typical of all firms in the boat sales business, what might be expected to happen in the future?
=+f. At the price and sales level where profits are max- imized, has Rod sold all boats that have higher marginal revenue than marginal cost?
=+e. What will Rod's profits be per week at this price and sales volume?
=+d. How many boats will Rod sell per week at the profit-maximizing price?
=+c. If Rod wants to maximize his profits, what price should he charge per boat?
=+b. Find Rod's marginal revenue and marginal cost from the sale of each additional boat.
=+a. Find Rod's economic profits at each alternative price by calculating the difference between total revenue and total cost.
=+*17. Rod N. Reel owns a dealership that sells fishing boats in an open, price-searcher market. To develop his pricing strategy, Rod hired an economist to esti- mate his demand curve. Columns (1) and (2) of the following chart provide the data for the expected weekly quantity demanded for Rod's
=+d. How will the situation change over time?
=+c. How much revenue will the firm receive in this situation? How much is total cost? Total profit?
=+b. What price will the firm charge?
=+a. What level of output will maximize the firm's profit level?
=+ 16. The accompanying graph shows the short-run de- mand and cost situation for a price searcher in a market with low barriers to entry.
=+influence the following: (a) the cost efficiency of producers. (b) the quality of products, and (c) the discovery and development of new products? Ex- plain your answers.
=+Is competition necessary for markets to work well? Why or why not? How does competition
=+13. What is the primary requirement for a market to be competitive?
=+*12. "When competition is really severe, only the big firms survive. The little guy has no chance." True or false? Explain.
=+Why do colleges often charge students different prices, based on their family income?
=+How does price discrimination affect the total amount of gains from exchange? Explain.
=+ 11. Is price discrimination harmful to the economy?
=+Is there an offsetting advantage to the other investments?
=+The group believes each endeavor has the same profit potential. Which is the safer (less likely to result in a substantial capital loss) investment? Why?
=+ Each new business would require about the same amount of capital and personnel hiring.
=+The group is considering either building a new hotel complex or starting a new local airline serving that market.
=+10. Suppose that a group of investors wants to start a business operated out of a popular Utah ski area.
=+ If a firm goes out of business, what happens to the firm's as- sets, workers, and customers?
=+9. Would our standard of living be higher if the gov- ernment "bailed out" troubled businesses?
=+b. What determines whether small firms, medium- size firms, or large firms will dominate in a market?
=+8.a. What determines whether corporations, individ- ual proprietorships, employee-owned firms, consumer cooperatives, or some other form of business structure will dominate in a market?
=+ Do you think you would get more or less for your con- sumer dollar under restrictions like these? Discuss. *
=+ Would you like to live in a country where government regulation restricted the use of quality and style competition? Why or why not?
=+6. Is quality and style competition as important as price competition?
=+What determines whether the new product will be a success or failure?
=+ 5. What must an entrepreneur do in order to introduce a new innovative product?
=+What would happen as a result to the average quality of automobiles if the proceeds of the tax were used to subsidize a government-operated lottery?
=+4. How would imposing a per-unit tax of $2,000 on each new U.S. automobile affect (a) higher-quality, higher- priced cars (those selling for more than the median price) compared to (b) lower-quality,lower-priced cars?
=+ Why do you think there are only a few different varieties of toothpicks but lots of different types of napkins on the market? *
=+3. What determines the variety of styles, designs, and sizes of different products?
=+What do competitive price searchers have to do to make eco- nomic profit? *
=+ In price-searcher markets with low barriers to entry, will the firms be able to make economic profit in the long run? Why or why not?
=+ 2. Since price searchers can set their prices, does this mean that their prices are unaffected by market con- ditions?
=+ How will the firm's marginal cost compare with its price at the profit-maximum output?
=+ What price will maximize the profits of a price searcher?
=+1. Price searchers can set the prices of their products. Does this mean that they will charge the highest possible price for their products?
=+ Why do some economists criticize price-searcher behavior when entry barriers are low, while others like the results? Is price discrimination bad?
=+ How do the actions of entrepreneurs influence economic progress?
=+Why is the role of the entrepreneur left out of economic models?
=+Are business failures bad for the economy?
=+ Is there a linkage between innovative actions by some firms and business failures by others?
=+ How are price and output determined in such markets?
=+What are the characteristics of competitive price-searcher markets?
=+i. How much would that net profit or loss be?
=+ h. If each firm's total fixed costs are $20 and the price of output is $20, which firm would earn a higher net profit or incur a smaller loss?
=+g. How many units will firm B produce at the $20 price? (Assume that it cannot produce fractional units.)
=+f. How many units will firm A produce if the market price is $20?
=+e. How many units of output will it produce?
=+d. What is the lowest price at which firmB will produce?
=+c. How many units of output will it produce at that price? (Assume that it cannot produce fractional units.)
Showing 200 - 300
of 7548
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last
Step by Step Answers
Get 50% OFF
Claim Now
