workgroup-solutions-monopoly-questions-and-solutions-chapter-10.pdf - lOMoARcPSD|1675695 Chapter 10 Monopoly REVIEW QUESTIONS 1 A monopolist is

Workgroup-solutions-monopoly-questions-and-solutions-chapter-10.pdf

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Chapter 10: Monopoly REVIEW QUESTIONS 1. A monopolist is producing at a point at which marginal cost exceeds marginal revenue. How should it adjust its output to increase profit? 2. We write the percentage markup of prices over marginal cost as (P - MC)/P. For a profit-maximizing monopolist, how does this markup depend on the elasticity of demand? Why can this markup be viewed as a measure of monopoly power? lOMoARcPSD|1675695
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3. Why is there no market supply curve under conditions of monopoly? 4. Why might a firm have monopoly power even if it is not the only producer in the market? 5. What are some of the sources of monopoly power? Give an example of each.
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