Chapter 1. Chapter 13
Step 1
Question
Consider an industry with the demand curve (D) and marginal cost curve (MC) shown in the accompanying diagram. There is no fixed cost. If the industry is a single-price monopoly, the monopolist’s marginal revenue curve would be MR. Answer the following questions by naming the appropriate points or areas.
The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
If the industry is perfectly competitive, what will be the total quantity produced? At what price?
Total quantity produced is yJlvtB4hkxI=.
Price is equal to 6eH6z9Q7GCA=.
Step 2
Question
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The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
Step 3
Question
If the industry is a single-price monopoly, what quantity will the monopolist produce? Which price will it charge?
The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
Total quantity produced is Vkg6Ff19M08=.
Price is equal to jE2JFFEMYDU=.
Step 4
Question
hfhlpK0WKSgsh74Mgeoqv8ustXclRH3LPpmp803+UMLK+MNz+gjKIkop0jMll3j7FHHLcCTyi1LNtK0p8WX6yrvRr0sRpTmcJ5C41KI2iq+m+AYWGIceNUKXaZRPxwE1hVceviC7KRgMRsMEtKmxU2Cq4GLHf1lz8DMUXAlzW7VxNd4kGO5xdFKVppvsSyuFwmR78NBKL7X3Ztc8HutMSKFnmDYrqoBzZgs7PqZs4IRecbZ6e3fjwgolQJsKtY3ZHVz3+GflHytt2PCWE4qEE9zjHynClaDbLr8irLOYu7iFpG8JPiYXdEm0XPjY6QKeKt0ix3LB4jyy+SKZkiFKBCGJt6sJyyMbgJ1vde/LlcXHpsNGsaR5Nlv/OiPJjk63X0l1God3M+w4ox5WJlhW/lH0EI2XJ7hqqoyGnYqt1SAH6mXaCAaMab8tZvuVXimxC70OpT1y/T97h80GX0wMGjCCQI6jUTPCHr5PrVgfFQ8coNII2zQFjBHSJlWUMc31zRBlmjpkLS2JNDt4ehBcmEBxfGKUO6zfIOHK0tYyLHHBQ9cPLJCxo6PCIQPvd/odcm45AXNgY51qOcHwPwWoe0jEcKffyCSle8Y1Jw+0MsWSPG3DwKSGZyrf/JjP/jHpUKI+xwDqnYVHyimKnbV3v/dIjAFqZxvBgwhKhX6rKvC68hhA5qRFwhLVBPY8pHcwZMHWtgdEM0EQNQ2qdw5kYmsmSx6E3/Q6TYHE0dqMLZ/AgAiaNCB/5aGODoGvlkJMqf6aizLeznBUJxrqKdEYhdu86BxkMwCwsjDX+m99MLVLKeUIO2115NVDgwD0rykTaqTpA35eP22QkPczURdSs4QkUuvXXV3DE6/ROJgSU+8NG6kgU+SfC9ZxwAyF98rL67l98Zc3A+ElZALzZaeLXjZpK/lpcdutaz/ym4vwyM8lqz/5hg73KRbODQBgdnBRcRQ1ekM4N/kRy/5vamPHyCbWpL94KRd7ryxL6aV6ZYDNpHr82qvK1Mb1wJ4NrIfCO6dFJdkHMFI8/IPLNE5DXFK9eGKfu9Y9hYz1d4MpJYgt0UfU3iC+Gs0Zd6MUXk/nnOy5FdPUaDx4GOKCHWbv0CIoH3zS0eAFP6LmEWrqAkWicN72/zHy8uP/vBWtft7w2e2py/N4E17QxWBpHAyjuAZFCpOuRgKHZl9ZPOxftqMr2vv20uXoZoqZmlz03gd2xP9fm9oRRZKxaidA2oSe/D/F4NkUMpFEtfRYMEexmyxqQMweYcxT8K9Vz43IVbFwhcABwiL8gOxdqkIdSXDjn4Tw8t5fL4NMzcMTlbvYA9cZ6/UUdvXFeCAUfSrT+kNwUSU7s+PAl5/ebilRewGGjDGN2xuxN36Yao1rMeqmKqy8jizJyZbxKQLtWpjyim2w7isKjOp0X3hcsRprQvlDqiDPGrmngFdLNspH96D72i2NPv+zL2mSQRc/M/WSvsxSy/eqvLu+ZagzoakHJLvVAU6ZCSRod18PmuLoSxJKsHuiyjWObKzWCSFhjr1Bgs4s43q4tvCvBUUG7KGlKBm59Xf5evuYtV+YmoGIJjO6x2CFriszYYW8yf5mI63qnVcGcCuFg/lKIgR8uLJDMLArk8N5eCOflaXpVYz/M9uE82Vh3ovv5dm8o0ZEBFhWTGKRvHbSray7gN199xXhOhTuV2XbukFdrOAK+m9LLtporeu/VesSm7From+RWFjITzlnK8YJUkh+lDpUzoqKzeXxZwAGpOHiOl/qIA4sYEQJKM3DZGl4qITH9R5VAZDaBh1qtGlUUfbtqQ+BSY2xIAE4Hx9p/iyFTGIRF2o8D5OR2gC1gmV2uSBWckqHlmWQkG/99mKhiqTJVy3v6VAdL0ORJdSGxML5au1pCJqYL+8rj7zahPQkMR6ZqIUA+IIJhIs6XJCxMvwaheToqHDSJ59cj0+u9qP/NabaUXV3u50gc0WKCwkSq6IEtdKEw+e6cuit/gDKgYj+YIeP9d0qkkZJ6DOU3VtKWvqNB3JG+sFipgNrDK1f0Qw+Md/i3vmDh/qM5es7qmwuIC1AIXKRe49utXMgtx2y0ycFViJ3ZG3X2uQJo3JtCiR01er0wfd/BuhXpOM057iDlnyClGHmvveNo7pGjFSrhvFaMM3YOihGtLPxm1sAR39FjkHULFjLaSgyXS01Jyv7QvOyw6OMJHkzOkmVwO4+0jqAQYyICngY471bWDRGLi3uz2w2rKB6HrwVehL3/Q==The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
Step 5
Question
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The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
Step 6
Question
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Step 7
Question
If the monopolist can price-discriminate perfectly, what quantity will the perfectly price-discriminating monopolist produce?
The horizontal axis is labeled ‘Quantity’, with points I, M, S, and T indicated from left to right. The vertical axis is labeled ‘Price’, with points A, B, C, and E indicated from top to bottom. The demand curve (D) starts from point A on the vertical axis and ends at point T on the horizontal axis. The marginal cost curve (MC) is a straight line extending from point E on the vertical axis. The marginal revenue curve (MR) starts from point A on the vertical axis and ends at point M on the horizontal axis. There are dotted lines drawn from points B and C on the vertical axis, as well as from points I, M and S on the horizontal axis. The points of intersection of all these points and the MR and D curves are labeled as follows: The dotted line extending from B has three points F, J, and N. The dotted line extending from C has three points G, K, and O directly below the points on the dotted line from B. The marginal cost curve MC, which extends from point E on the vertical axis, also has three points H, L, and R directly below the points on the previous two dotted lines.
Total quantity produced is yJlvtB4hkxI=.