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Chapter 24: Q. 24.1LO (page 535)

Identify situations that can give rise to monopoly

Short Answer

Expert verified

As a result, there is no variation between firm's offering and market supply in an extremely pure monopoly.

Step by step solution

01

Introduction

In a rather market system, there are also many organizations, but neither of them would be especially large. During an excessively monopolistic market, on the other hand, there is just one big company. Now this organization supports the entire sector.

02

Given Information

The cartel doesn't really experience any competition since there are no close substitutes.

03

Explanation

Requirements establish an oligopolistic industry framework. For starters, the market is focused on a single company. Second, there are more than hurdles. These hurdles are so strong that another company will be unable to join the market. Third, no close alternatives exist for such nice that the monopolistic company produces.

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Most popular questions from this chapter

Suppose that initially the data in Problem 24-17 apply, but then an increase in fixed costs occurs. As a result, the ATC curve in Figures 24-6 shifts upward. Consequently, the average total cost of producing 9.5 units of output rises to $5 per unit. Does the monopolist's profit-maximizing weekly output rise, fall, or remain the same? What is the new amount of maximized weekly economic profits?

A monopolist's maximized rate of economic profits is \(5,000per week. Its weekly output is 500units, and at this output rate, the firm's marginal cost is \)15 per unit. The price at which it sells each unit is $40 per unit. At these profit and output rates, what are the firm's average total cost and marginal revenue?

Consider the information from Problems 24-13. If the total costs of producing 13 units were equal to $72.70 per week, would the marginal revenue of producing the 13 th unit (your answer to Problem 24-13) be greater or less than the marginal cost of producing that unit? How would the firm's weekly economic profits be affected if the firm were to produce the 13 th unit?

Demand has fallen. What is going to happen to the monopolist's price, output rate, and economic profits?

Why do you suppose that the Marseilles drug dealer also seeks to prevent customers from reselling drugs to other buyers?
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