Homework SourseQ1The table below shows a monopolists demand curve and the c
Q1:The table below shows a monopolist\'s demand curve and the cost information for the production of its good. What will their maximum profit be? (to determine profit, calculate total revenue and total cost for each quantity)
Q2: If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely NOT be the focus of the arguments that they will present in favor of the merger?
Q3:why does a monopoly face a down sloping demand?
| Quantity | Price per Unit | Total Cost |
|---|---|---|
| 10 | $100 | $100 |
| 20 | $80 | $400 |
| 30 | $60 | $800 |
| 40 | $40 | $1,400 |
| 50 | $20 | $2,400 |
Solution
Q2: If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely NOT be the focus of the arguments that they will present in favor of the merger?
Answer Option:- D) the newly created firm will have a greater market share
Explanation:- if two companies are seeking regulatory approval to merge their respective businesses, their main concern is to focus on getting economies of scale by sharing the resources of both companies this will help in reducing the cost of production so that they can extend that benefit to the consumer in lowering price and they least focused about the market share.
Q3:why does a monopoly face a down sloping demand?
Answer Option:- a)since it controls the market it faces a market demand
Explanation:- because a monopoly is the single seller who control the market, by lowering its price a monopoly can create more demand for its product. So it faces a downward sloping demand curve having relatively less elasticity of demand.
| Q1) | ||||||
| Quantity | Price per Unit | Total Cost | Total Revenue | Total Profit | ||
| 10 | 100 | 100 | 1000 | 900 | ||
| 20 | 80 | 400 | 1600 | 1200 | Maximum Profit | |
| 30 | 60 | 800 | 1800 | 1000 | ||
| 40 | 40 | 1,400 | 1600 | 200 | ||
| 50 | 20 | 2,400 | 1000 | -1400 | ||
| Total Revenue = Quantity x Price per unit | ||||||
| Total Profit = Total Revenue - Total Cost | ||||||
| maximum profit = 1200 | ||||||
| Answer Option A |
