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Unformatted text preview: b) Again, the monopoly midpoint rule applies. Since the monopolist will charge a price halfway between the choke price (which has risen $20) and the constant marginal cost, the monopolist will be induced to raise price by onehalf the amount of the shift in demand or $10, to $70. Use the following diagram to answer the next five questions 3. The profitmaximizing price for a perfectly competitive firm would be a) 180 b) 210 c) 240 d) Between 210 and 240 Ans: B 4. The profitmaximizing price for a monopolist would be a) 180 b) 210 c) 240 d) Between 210 and 240 Ans: C 5. The total economic benefit under perfect competition would be a) 2,700 b) 1,350 c) 675 d) 500 Ans: B 6. The total economic benefit under monopoly would be a) 300 b) 600 c) 900 d) 1,200 Ans: D 7. The deadweight loss under monopoly would be a) 75 b) 150 c) 225 d) 300 Ans: B...
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This note was uploaded on 01/30/2011 for the course 730 368 taught by Professor Bryant during the Spring '08 term at Rutgers.
 Spring '08
 Bryant

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