Economic - 7557 Words

CHAPTER 24 Pure Monopoly A. Short-Answer, Essays, and Problems 1. What are the major characteristics of pure monopoly? 2. What are the major barriers to entry that explain the existence of monopoly? 3. What is the relationship between economies of scale and a natural monopoly? 4. Some economists argue that pure monopolists will purposely avoid the price-output combination that will maximize their profits. Explain how this less-than-maximum profit behavior could be rational. 5. In what ways, if any, do the demand schedules for a purely competitive firm and a pure monopolist differ? What significance does this have for the price-output behavior of each? 6. Why†¦show more content†¦Explain. (b) What do the data in the table indicate about the elasticity of demand? 11. In the following table are demand and cost data for a pure monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total profit will the monopolist receive at the profit-maximizing level of output? Total Marginal Total Marginal Quantity Price revenue revenue cost cost 0 $34 $______ $ 20 1 32 ______ $______ 36 $______ 2 30 ______ ______ 46 ______ 3 28 ______ ______ 50 ______ 4 26 ______ ______ 54 ______ 5 24 ______ ______ 56 ______ 6 22 ______ ______ 64 ______ 7 20 ______ ______ 80 ______ 8 18 ______ ______ 100 ______ 9 16 ______ ______ 128 ______ 10 14 ______ ______ 160 ______ 12. Why is there aShow MoreRelatedEconomics And Economics On Economics Essay1142 Words   |  5 PagesWhen we talk about economics we must first defined the word. Economics is a social science that studies human behavior and how to allocate our limited (scares) resources, efficiently and effectively to meet our unlimited human wants. Now as we dive deeper in to the field of economics we realized that there are two separate categories that the study of economics breaks off into. The first is macroeconomics, macroeconomics is the study of the whole picture when it comes to economics. Macroeconomics willRead MoreEconomics : Economics And Micro Economics1238 Words   |  5 Pages Economics is the study of how our unlimited demand of certain things can be met by our limited amount of supply. For instance, if there was an unlimited amount of money for everyone, then everyone would have everything they had always wanted and would not have to work to get the money. Everyone would h ave billion dollar homes and the nicest cars in the world. Unfortunately, we do have a limited amount of money, so the economists find ways to get around that. 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