hwk4key - ECON 2020 Homework 4. Name _key_ P consumer...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 2020 Homework 4. Name ______key______________ P M C MR D consumer surplus p* q q* The diagram above represents a monopoly. I. a) On this graph, indicate by p* and q* the equilibrium (profit-maximizing) price and quantity. 10 pts. b) Shade in the area of consumer surplus (use stripes or color it in). 10 pts. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
P M C MR D q Profits are the shaded rectangle. Dead-weight loss is the patterned triangle. II. Use the monopoly diagram above to show a) total Monopoly profits (6 pts), and b) the dead-weight loss from a monopoly (6 pts). 2
Background image of page 2
P MC AC D MR p* q q* III. a) (5 pts) This diagram shows (circle the correct answer) (correct answer in boldface): a) Profit-maximization in a monopoly b) A perfectly competitive market c) Long-run equilibrium for a firm under monopolostic competition d) An oligopoly with rivalry. b) (10 pts) On the diagram, show the equilibrium price (p*) and quantity (q*). c) (5 pts) What are the profits for this firm? _____0______ d) (5 pts) True or False (circle correct answer). In this diagram the selling price is equal to Marginal Cost. False 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
IV. The following information comes from a firm operating under a monopoly. Fixed Costs are $60.00. Fill in the table, 15 pts.
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

hwk4key - ECON 2020 Homework 4. Name _key_ P consumer...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online