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What is a monopoly produces in perfectly competitive market?
In a perfectly competitive market, a monopoly would produce at a level where marginal cost equals marginal revenue, but unlike in perfect competition, it would restrict output to maximize profits. This results in higher prices and lower quantities than would occur in a competitive market, where many firms produce the same product and prices are driven down to marginal cost. Consequently, a monopoly typically leads to inefficiencies and a welfare loss in the economy, as consumer surplus is reduced and producer surplus increases.
Why is marginal revenue less than price for a monopolist?
Marginal revenue is less than price for a monopolist because in a monopoly market, the monopolist is the sole seller and has the power to set the price. To sell more units, the monopolist must lower the price, which reduces the revenue gained from each additional unit sold. This results in marginal revenue being less than the price.
How could weistinguish between average propensity to consume from marginal propensity to consume?
The average propensity to consume is the fraction of total disposable income that households spend on consumption (as opposed to saving for example) whereas marginal propensity to consume is the additional consumption that results from an additional dollar of disposable income.
Using diagram explain How equilibrium price and output a determined by a monopoly firm?
In a monopoly market, the equilibrium price and output are determined at the point where the marginal cost (MC) of production equals the marginal revenue (MR) that the firm receives from selling an additional unit. The monopolist sets the price higher than the marginal cost to maximize profit, leading to a downward-sloping demand curve. The intersection of the MR and MC curves indicates the profit-maximizing quantity of output, while the corresponding price is found on the demand curve at that quantity. This results in a higher price and lower output compared to a competitive market, leading to a deadweight loss in overall economic efficiency.
Why a monopoly can lead to inefficient outcomes?
There are various reasons why monopoly leads to an inefficient outcome. Some of the reasons are as follows: * It produces less output that what a competitive market would and charge higher price which ultimately leads to a decline in consumer surplus and a deadweight loss. * Monopoly charges a price above its marginal cost, i.e. P > MC, and this results in an allocative inefficiency * A monopoly doesn't produces at the lowest point of the average cost curve (AC) and hence it leads to production inefficiency. * Monopoly has less incentive to cut cost as it doesn't face competition. This is often termed as X-inefficiency. * A monopoly makes supernormal profit (economic profit), i.e. Q * (AR - AC), leading to an unequal distribution of income. * Monopoly produces less than perfect competition and hence creates unemployment of resources. * By producing less in order to charge higher price, monopoly creates an artificial scarcity. The inefficiency associated with a creation of artificial scarcity is called the Deadweight Loss. (Written by Manish Regmi )
Why is marginal revenue less than price for a monopolist?
Marginal revenue is less than price for a monopolist because in a monopoly market, the monopolist is the sole seller and has the power to set the price. To sell more units, the monopolist must lower the price, which reduces the revenue gained from each additional unit sold. This results in marginal revenue being less than the price.
How could weistinguish between average propensity to consume from marginal propensity to consume?
The average propensity to consume is the fraction of total disposable income that households spend on consumption (as opposed to saving for example) whereas marginal propensity to consume is the additional consumption that results from an additional dollar of disposable income.
What type of regulation results from the activites of the endocrine and the nervous system?
Extrinsic regulation
Why a monopoly can lead to inefficient outcomes?
There are various reasons why monopoly leads to an inefficient outcome. Some of the reasons are as follows: * It produces less output that what a competitive market would and charge higher price which ultimately leads to a decline in consumer surplus and a deadweight loss. * Monopoly charges a price above its marginal cost, i.e. P > MC, and this results in an allocative inefficiency * A monopoly doesn't produces at the lowest point of the average cost curve (AC) and hence it leads to production inefficiency. * Monopoly has less incentive to cut cost as it doesn't face competition. This is often termed as X-inefficiency. * A monopoly makes supernormal profit (economic profit), i.e. Q * (AR - AC), leading to an unequal distribution of income. * Monopoly produces less than perfect competition and hence creates unemployment of resources. * By producing less in order to charge higher price, monopoly creates an artificial scarcity. The inefficiency associated with a creation of artificial scarcity is called the Deadweight Loss. (Written by Manish Regmi )
When will 6th semester results come for trichy Anna univ 2008R?
Anna University UG PG 1st 3rd 5th 7th Semester Nov Dec 2015 Results - UG PG Regulation 2008 Regulation 2013 Regulation 2015 Results Nov Dec 2015 Jan Feb 2016 Exam Results Declared
When someone buys a fourth T.V for his house what is the results?
There's a decrease in the marginal utility of the television.
What are the results of the Ottoman loss of monopoly over the Indian trade?
ottoman empire?
What is the end results of the creation of a monopoly?
One company controls a whole industry.
What revenue is the change in total revenue that results from selling one more unit of output?
Marginal Revenue =
What is the economic impact of deadweight loss in a monopoly market structure, as illustrated in the corresponding graph?
Deadweight loss in a monopoly market structure represents the economic inefficiency caused by the monopolist restricting output and charging higher prices. This results in a loss of consumer surplus and overall economic welfare. The corresponding graph shows the area of deadweight loss as the triangle between the demand and marginal cost curves, highlighting the inefficiency in resource allocation.
How can one determine the marginal revenue on a graph?
To determine the marginal revenue on a graph, you can find the slope of the revenue curve at a specific point. The marginal revenue is the change in total revenue that results from selling one additional unit of a product. It is calculated by finding the derivative of the revenue function.
A perfectly competitive firm will produce more output and change a lower price than a single price monopoly firm. Do you agree or disagree with this statement?
I agree with the statement. A perfectly competitive firm operates where price equals marginal cost, leading to an efficient allocation of resources and typically resulting in a higher output at a lower price than a monopoly. In contrast, a single-price monopoly maximizes profit by producing less output and charging a higher price, leading to decreased consumer surplus and potential market inefficiencies. Thus, perfect competition generally results in greater output and lower prices compared to monopoly scenarios.
