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Can monopolist set high price for his product and still enjoy a high level of demand?
Yes, a monopolist can set a high price for their product and still enjoy a high level of demand, particularly if the product is unique and essential, with few or no substitutes. In such cases, consumers may be willing to pay a premium for the product due to its perceived value, brand loyalty, or necessity. However, the monopolist must be cautious, as excessively high prices could eventually lead to reduced demand or encourage the development of alternatives.
How does a monopolist decide how much product to make?
A monopolist decides how much product to produce by determining the profit-maximizing output level, where marginal cost (MC) equals marginal revenue (MR). Unlike firms in competitive markets, a monopolist faces a downward-sloping demand curve, meaning it can influence the market price by adjusting production levels. The monopolist will produce less than the socially optimal quantity, leading to higher prices and reduced consumer surplus compared to competitive markets. Ultimately, the goal is to maximize economic profit rather than total output.
A monopolist will set its production at a level where marginal cost is equal to?
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
What determines a demand for a product?
Purchase power,income level,necessarity,willingness
Distinguish between demand estimation and demand forecasting?
Demand estimation's purpose is to determine the approximate level of demand for the product whereas demand forecasting's purpose is to estimate the quantity of product or service that consumers will purchase.
A monopolist will set its production at a level where marginal cost is equal to?
A monopolist will set production at a level where marginal cost is equal to marginal revenue.
What determines a demand for a product?
Purchase power,income level,necessarity,willingness
Distinguish between demand estimation and demand forecasting?
Demand estimation's purpose is to determine the approximate level of demand for the product whereas demand forecasting's purpose is to estimate the quantity of product or service that consumers will purchase.
When can monopolist earn an economic profit?
A monopolist earns economic profit when the price charged is greater than their average total cost. To maximize profits, monopolies will produce at the output where marginal cost is equal to marginal revenue. To determine the price they will set, they choose the price on the demand curve that corresponds to this level of production.
Which influence on spending deals with the motivation to purchase a product?
the price of the product and the willingness of the consumer to purchase the product impact the demand of the product by the consumer. lower the price, higher will be the demand and higher is the motivation level to buy the good.
What is public demand?
Public demand is the demand placed on something by the public. It may be a product, a new law, or almost anything, and is the level to which the public does or does not want something.
Definition of market penetration?
Market penetration is defined as the measure of a product's popularity. This identifies the level of demand for a specific product.
Why is aggregate supply related to the price level?
This is in accordance to the Demand & Supply Theory... When the demand for a product is high and its supply is low, this usually causes the price of that commodity to increase Similarly when supply for a product is high and the demand for that product is low, it causes the price of that product to decrease. Hence the supply is inversely related to the price of any product (Provided the Demand is in accordance to the two points mentioned above)
Does the demand for a product in general tend to be more inelastic than the demand for that product from a particular supplier?
no, product demand in general tends to be more elastic because there are more options the consumer can choose from. demand for the product in general allow for the principle of "substitution" to be used by the consumer. if one producers price is too high then the customer will be able to shop around for the best price available for that product. demand from a singular supplier is more price sensitive, and with demand being inversely related to price and increase in price negatively impacts the level of demand and visa-versa
3 business risks which may influence profit level?
1) lack in demand of product 2) Natural disasters 3) lack of consumer confidence in product
How can one determine the market demand curve for a product or service?
To determine the market demand curve for a product or service, one can conduct market research to gather data on consumer preferences, pricing, and purchasing behavior. By analyzing this data, economists can plot the relationship between the quantity demanded and the price of the product or service, resulting in a demand curve that shows the level of demand at different price points.
How do you calculate the reorder level?
The following formula can be used to find the reorder levels:Normal stock plus the product of average demand and lead time is the formula for the reorder level.
