This firm is a natural monopoly. If the firm produces 72 units and charges $24 per unit, it will stay in business in the long run. Which quantity of output is consistent with price regulation? 44 units 64 units 72 units Which quantity of output is consistent with profit regulation? 44 units 64 units 72 units
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The following graph depicts the demand (D), marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves for a firm operating as a natural monopoly. Market for a Natural Monopoly 80 70 Costs and Revenues (dollars) 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 90 100 MC ATC D MR
Crystal W.
A perfectly competitive firm has the following short-run total cost: $$ \begin{array}{c|c} \text { Quantity } & \text { TC } \\ \hline 0 & \$ 5 \\ 1 & 10 \\ 2 & 13 \\ 3 & 18 \\ 4 & 25 \\ 5 & 34 \\ 6 & 45 \end{array} $$ Market demand for the firm's product is given by the following market demand schedule: $$ \begin{array}{c|c} \text { Price } & \text { Quantity demanded } \\ \$ 12 & 300 \\ 10 & 500 \\ 8 & 800 \\ 6 & 1,200 \\ 4 & 1,800 \end{array} $$ a. Calculate this firm's marginal cost and, for all output levels except zero, the firm's average variable cost and average total cost. b. There are 100 firms in this industry that all have costs identical to those of this firm. Draw the shortrun industry supply curve. In the same diagram, draw the market demand curve. c. What is the market price, and how much profit will each firm make?
The dominant firm's total cost function is TC(q) = q. (The dominant firm has a constant marginal cost MC(q) = 1 for all q ≥ O. It also has a constant average cost AC(q) = 1 for all q ≥ 0.) The market demand is given by Qm (P) = 22 - 4P. There are 10 small firms, each of these firms has the following total cost function: TC(q) = q + 0.6250}. These small firms behave competitively: they take the market price as given and choose the profit maximizing quantity q. Therefore, the total quantity these 10 firms will supply is given by the following equation which we refer to has the fringe supply Sf(P) = -8 + 8P . Please compute the dominant firm equilibrium. 1) What is the quantity the dominant firm produces in equilibrium? 2) What is the total quantity supplied by the fringe in equilibrium? 3) What is the market price? For this equilibrium please compute 4) the Lerner index for the dominant firm 5) the HHI of market concentration 6) the dominant firm's profit 7) the total profit of the 10 small firms 8) the consumer surplus
Breanna O.
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