


Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
A demand and cost schedule for a monopolist, along with instructions for calculating total revenue, marginal revenue, profit-maximizing output, price, and profit. The document also requires students to graph the demand curve, marginal revenue curve, and profit curve, and determine the allocatively efficient price and output under government regulation.
Typology: Assignments
1 / 4
This page cannot be seen from the preview
Don't miss anything!
Note: Because our next exam is on Tuesday, Mar. 31, we will be going over this problem in class on Thursday, Mar. 26. THUS, I WILL ACCEPT NO HOMEWORKS AFTER I COLLECT THEM IN CLASS ON MARCH 26. NAME__________________________ TOTAL POINTS = 40
b. Assume the government lets the monopolist operate freely. Determine the monopolist’s: i. Profit-maximizing (or loss-minimizing) level of output. ii. Price. iii. The profit or loss earned at the optimal level of output. Show calculations and explain reasoning clearly. (9 points)
d. Suppose that the government decides to regulate this monopolist. Suppose the government wants the monopolist to produce the allocatively efficient amount of output. i. What price will the government force the monopolist to charge for each unit of output it sells? Why? ii. How much output will the monopolist produce and sell at this price? ( NOTE: In forcing the monopolist to charge the same price no matter how much output it sells, the government is forcing the monopolist to behave as a perfectly competitive firm ). iii. What is the monopolist’s profit? iv. If the government continues to force the monopolist to charge this price, do you think the monopolist will want to continue producing the product in the long-run? (Assume the ATC and MC curves pertain to the long-run). Why or why not? Explain your reasoning clearly. (11 points)