# Microeconomics- Monopoly

Suppose Ralph and Ed have the only store that sells toilet bowls in northern Maine. Their nearest competitor is 211 miles away, and these two men have a reputation for producing high-quality toilet bowls. Graphically illustrate what the market for toilet bowls will look like for Ralph and Ed. Shade in the area of profit for Ralph and Ed and label the profit maximizing price (Pe) and quantity (Qe).

Then, suppose a new federal law is passed that forces all toilet bowl manufacturers to install devices that reduce the amount of water used per flush. Using a second graph, illustrate and explain what impact this new law will have on Ralph and Ed. Shade in the new area of profit for Ralph and Ed and label the profit maximizing price (P1) and quantity (Q1). Make sure to show the old profit maximizing price (Pe) and quantity (Qe) as well.

According to the question, Ralph and Ed owns a monopoly in their town. So the graph is drawn in the following: If the law allows them to install new equipment, it means The cost of producing toilet seats increases. therefore, The average cost increases. Therefore, the average cost curve continues to rise Figure. It may even move to the lowest point on the curve Is on the demand/average income curve, which means there will be no Extraordinary profits. Similar Homework Help Questions
• ### Microeconomics- AP FRQ Practice

Assume that electricity production has been done by several regional firms in the U.S. each operating as a pure monopoly.Explain and graphically illustrate how the electrical monopolist would determine its profit maximizing price and output level. (Label Pm and Qm)Identify any area of consumer and/or producer surplus for the profit maximizing monopoly.Identify the deadweight loss for the monopolist.Now assume the federal government imposes a regulation on the monopoly. Draw a new monopoly graph for part 2.Show and explain how the...

• ### In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve... In some cities, Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - 1Q. However, during weekend nights, or surge hours, the demand for rides increases dramatically and the new demand curve is: P = 100 - 1Q. Assume that marginal cost is initially 0. What is the profit maximizing price during weekdays and surge hours? (Round answers to 2 decimal places as needed.) The...

• ### 1. A monopolistically competitive sneaker firm is currently in long run equilibrium. a. Graph the firm...

1. A monopolistically competitive sneaker firm is currently in long run equilibrium. a. Graph the firm in long run equilibrium. Be sure to label all of the curves and the profit-maximizing price and quantity. b. The price of rubber decreases. Rubber is a major component in the production of sneakers. Draw a new graph that shows the change in the profit maximizing price and quantity of sneakers. Be sure to shade the area of loss or profit. .

• ### 2. In a market, the demand is Q = 50 - P. A monopoly company operating... 2. In a market, the demand is Q = 50 - P. A monopoly company operating in this market has the cost function C = 150. (a) Illustrate demand, marginal cost, and marginal revenue in a figure. (b) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (c) Now suppose that the cost function is instead C = F+Q? which means that the fixed cost is F and MC = 20. How big...

• ### Assume that in the independent nation of Qari sugar production is controlled by a sugar monopoly,...

Assume that in the independent nation of Qari sugar production is controlled by a sugar monopoly, SugarCo, which earns economic profits. There are well over a million buyers of sugar in Qari but only one seller of sugar. Imports of sugar are forbidden. a. In what type of market structure does SugarCo compete? List and briefly explain the characteristics of this market structure. b. Draw a graph that shows the determination of the profit maximizing price and quantity of sugar...

• ### In a market, the inverse demand is P = 60 - Q. A monopoly company operating... In a market, the inverse demand is P = 60 - Q. A monopoly company operating in this market has the cost function C = 200. (a) What is the marginal cost of the company? What are the fixed costs? (b) Illustrate demand, marginal cost, and marginal revenue in a figure. (c) What is the profit-maximizing quantity? Explain why. What is the price thus? Illustrate in the figure. (d) Now suppose that the cost function is instead C=F+Q', which means...

• ### Price/Cost (\$) 7) Monopoly II (6 points) The marginal costs (MC), average variable costs (AVC), and... Price/Cost (\$) 7) Monopoly II (6 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below. The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market. 501 ATC AVC a. What is the firm's profit-maximizing level of output? Label this on the graph. b. What price will the monopolist charge for that level of output? Label this on the graph....

• ### 2. A perfectly competitive potato farm is currently in long run equilibrium. a. Graph the firm...

2. A perfectly competitive potato farm is currently in long run equilibrium. a. Graph the firm in long run equilibrium. Be sure to label all of the curves and the profit maximizing price and quantity. b. The demand for potatoes increases. Draw a new graph that shows the impact on an individual firm. Be sure to shade the area of loss or profit. c. Draw a new graph that shows how the firm and the industry adjusts to a new...

• ### 5. Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a... 5. Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run perfectly competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves ( S MC) in the market for hot dogs. Place the black point...

• ### CENGAGE | MINDTAP Aplia Homework: Monopoly 5. Monopoly outcome versus competition outcome Consider the daily market... CENGAGE | MINDTAP Aplia Homework: Monopoly 5. Monopoly outcome versus competition outcome Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run competitive equilibrium, with many hot dog stands in the city, each one selling the same kind of hot dogs. Therefore, each vendor is a price taker and possesses no market power. The following graph shows the demand (D) and supply curves (S - MC) in the market for hot dogs....

Free Homework App