Homework SourseAssume that there is only one Movie theater in Suffolk Count
Assume that there is only one Movie theater in Suffolk County. All the information you have is summarized in the following graph [you have number of movie displays in the horizontal axis, and prices per ticket in the vertical axis (assume all the movie displays are given at the same ticket price regardless the movie category (action, romantic, drama, etc), time of display (morning, night) or type of display (2D, 3D or IMax))]:
figure E5
Complete the statement:
Under perfect competition, and assuming there are many identical firms, so that the MC curve give us the Market supply curve, then the equilibrium price and quantity are: _______ and______. Therefore, the deadweight loss of the monopoly is given by the area _________.
A.
Pc=15; Qc=600; FCE
B.
Pc=10; Qc=500; AEC
C.
Pc=15; Qc=600; AEC
D.
Pc=18; Qc=500; AFC
Assume that there is only one Movie theater in Suffolk County. All the information you have is summarized in the following graph [you have number of movie displays in the horizontal axis, and prices per ticket in the vertical axis (assume all the movie displays are given at the same ticket price regardless the movie category (action, romantic, drama, etc), time of display (morning, night) or type of display (2D, 3D or IMax))]:
figure E5
Complete the statement:
Under perfect competition, and assuming there are many identical firms, so that the MC curve give us the Market supply curve, then the equilibrium price and quantity are: _______ and______. Therefore, the deadweight loss of the monopoly is given by the area _________.
A.
Pc=15; Qc=600; FCE
B.
Pc=10; Qc=500; AEC
C.
Pc=15; Qc=600; AEC
D.
Pc=18; Qc=500; AFC
Solution
Option A is the correct answer.
Equilibriumprice=15 and quantity is 600.
It is determined by intersection point of the demand and supply curves.
FCE is dead weight loss of the monopoly or the producer surplus loss when the market operates at the monopolistic output instead of the competitive output.
