Question 1 ECON100 Economic Essentials for Business Tutorial 3- Solutions (Based on Chapters 8 and 11) a. \"A firm can have a monopoly power for any products for which there are no substitutes\" Do you agree? Briefly explain. b. 'Being the only seller in the market, the monopolist can choose any price and quantity it desires.' Is this statement true or false? Explain. c. Whatis a natural monopoly? How does a natural monopoly arise? Question 2 Use the following graph for a monopoly to answer the questions that follow. ATC What quantity will the monopoly produce, and what price will the monopoly charge? i I =y 50 B0 90 100 Quantity What is likely to happen to this monopoly in the long run? c. Suppose the monopoly is regulated. If the regulatory agency wants to achieve economic efficiency, what price should it require the monopoly to charge? How much output will the monopoly produce at this price? Will the monopoly make a profit if it charges this price? Briefly explain. Question 3 The government of a hypothetical country has granted exclusive rights to a firm to produce plastic syringes. Table below shows the market demand and cost of production data for this monopolist per day. Price per Case | Quantity per | Total Revenue | Marginal Total Cost Marginal Cost $ Day (cases) $ Revenue $ $ $ 16 1 6.50 15 2 9.00 14 3 11.00 13 4 12.50 12 5 14.50 11 6 17.50 10 7 21.50 9 8 25.00 8 9 30.00 7 10 35.50 a. Fill in the remaining values in the table