00:01
So here we have a lot of questions about monopoly and monopolistic competition.
00:05
We're talking about how a monopoly makes decisions.
00:09
So a is wrong because it says takes price, right? a monopolist doesn't take the price.
00:18
The monopolist controls the market so they can set their own price, right? the correct answer here is set mr equals mc and then price from demand.
00:28
This is exactly what a monopolist does.
00:31
They figure out the optimal quantity and the demand curve determines the price, right? c is wrong because it says it's got this takes quantity bit.
00:42
Again, the monopolist can choose the quantity it wants.
00:45
It doesn't have to take the quantity.
00:47
And in d, we have price equals to marginal revenue and that's absolutely not true in monopoly, right? so 13, we have monopolistic competition here.
01:01
And the idea here is economic profit is attractive.
01:07
People like economic profit.
01:10
Economic profit induces entry.
01:14
People see the economic profit and so they come desiring the economic profit and that induces extra firms to enter the industry, right? so c.
01:25
And when you have extra firms, that means that the price falls and that gets you back down to zero profit in the long run.
01:36
Finally, then we have this first short answer question here where we have a whole bunch of stuff.
01:48
So for part a, the consumer surplus is the triangle below the price.
01:54
The price is 30...