Question
Suppose that a producer in a previously competitive market is granted the sole right to produce in the market. Given that demand in the market is unchanged but now all consumers must purchase from the same producer, why might the new monopolist

Question
Suppose that De Beers and the local water utility are both monopolists, in the markets for diamond jewelry and water, respectively. If both monopolies decided to raise prices 15 percent, which monopoly would be more likely to see its total revenue decrease?

Question
Suppose a city has a chain of fitness centers (gyms) all owned by the same company, Fit Fun. A new company is considering opening a gym in the city. Give an example of an aggressive tactic Fit Fun might take to maintain

Question
Suppose a museum charges different entrance fees for children, students, adults, and seniors, but these groups all pay the same amount for souvenirs at the gift shop. Explain why the museum price discriminates on admission but not souvenirs.

Subject
business-economics
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Question
Suppose a small town has one theater for live performances and one Indian restaurant. Will it be easier for the theater or for the Indian restaurant to price discriminate?

Subject
business-economics

Question
Suppose that your state is considering a law that would force all monopolies to charge the efficient price that would prevail if the market were competitive. Explain to your legislator why the state will have to subsidize natural monopolies if this law

Question
If competition places discipline on costs, motivating firms to innovate and find more cost-effective ways to produce, explain why in some markets a single firm without competitors will produce at a lower cost than if the firm faced competition.

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Question
The cost curves for an individual firm are given in Figure 13P-3.
a. In Figure 13P-3 (A), highlight the firm’s short-run supply curve.
b. In Figure 13P-3 (B), highlight the firm’s long-run supply curve.

Subject
business-economics

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Question
The marginal costs, average variable costs (AVC), and average total costs (ATC) for a firm are shown in Figure 13P-2. In the figure, mark the quantity the firm will choose to produce in the short run given this cost structure and the

Question
The data in Table 13P-3 are the monthly average variable costs (AVC), average total costs (ATC), and marginal costs (MC) for Alpacky, a typical alpaca wool-manufacturing firm in Peru. The alpaca wool industry is competitive. For each market price given below, give