1) Firm B has a monopoly for product X because of a license of the state....

 

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1) Firm B has a monopoly for product X because of a license of the state. Suppose that the marginal cost curve of B is ascending and that it makes a profit. a) Draw a diagram with demand curve, marginal revenue curve, average total cost curve, marginal cost curve and explain the monopoly quantity, monopoly price and monopoly profit on this market. b) What happens to the monopoly quantity, price and profit when the fixed costs of the monopolist B increase? (with diagram) c) What happens to the monopoly quantity, price and profit when the marginal costs of the monopolist B increase? (with diagram) 2) Explain the term "natural monopoly" (with diagram). 1) Firm B has a monopoly for product X because of a license of the state. Suppose that the marginal cost curve of B is ascending and that it makes a profit. a) Draw a diagram with demand curve, marginal revenue curve, average total cost curve, marginal cost curve and explain the monopoly quantity, monopoly price and monopoly profit on this market. b) What happens to the monopoly quantity, price and profit when the fixed costs of the monopolist B increase? (with diagram) c) What happens to the monopoly quantity, price and profit when the marginal costs of the monopolist B increase? (with diagram) 2) Explain the term "natural monopoly" (with diagram).

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