Questions
What is your name?
Sketch a graph for a monopoly that is earning economic profit.
Label the axes.
The profit maximizing price is $100
The profit maximizing quantity is 50
Show the demand, marginal revenue, marginal cost, and average total cost curves facing the firm.
Shade the area that equals the firm’s profit.
Identify the socially efficient quantity on the graph.
Shade the area that equals the dead weight loss.
Table B
Q |
P |
ACT |
MC |
10 |
270 |
150 |
115 |
11 |
268 |
147.91 |
127 |
12 |
266 |
147.17 |
139 |
13 |
264 |
147.46 |
151 |
14 |
262 |
148.57 |
163 |
15 |
260 |
150.33 |
175 |
16 |
258 |
152.63 |
187 |
17 |
256 |
155.35 |
199 |
18 |
254 |
158.44 |
211 |
19 |
252 |
161.84 |
223 |
20 |
250 |
165.50 |
235 |
21 |
248 |
169.38 |
247 |
22 |
246 |
173.45 |
259 |
23 |
244 |
177.70 |
271 |
24 |
242 |
182.08 |
283 |
What quantity minimizes average total cost? Quantity = _____
What quantity maximizes profit? Quantity = a =______
What price maximizes profit? Price = $_____
What is the maximum profit? Profit = $_____
What is marginal cost when quantity = a, your answer in question 4?
MC = $_____
What is the socially efficient quantity? Q = ___
What is the dead weight loss when the firm maximizes profit?
Dead weight loss = $____
9.Name a product you purchased recently from a store in Richmond. _________
10. Does the store operate in a monopolistic ally competitive industry?
Yes
No
11. Describe how the industry meets or fails to meet each of the characteristics of monopolistic competition.
Watch this ad for Codfish sandwich.
12. Make the best case you can that this ad is not improving the efficiency of the allocation of the economies resources.
13. Make the best case you can that this ad is improving the efficiency of the allocation of the economies resources.
14. Which argument do you find most compelling? Why?