Natural monopolist is forced to price at marginal cost

Assignment Help Business Economics
Reference no: EM13891908

If a natural monopolist is forced to price at marginal cost, does surplus increase or decrease and why? I thought that consumer surplus increased more than the producer lost because now production would be where MC crosses D rather than where MC crosses MR. Correct? Please explain.

Reference no: EM13891908

Questions Cloud

About the inflation is repudiation : When Calvin Coolidge was vice president and giving a speech about government finances, he said that: “inflation is repudiation.’’ What might he have meant by this? Do you agree? Why or why not? Does it matter whether the inflation is expected or unex..
Describe an entrepreneurial opportunity : Entrepreneurs see an opportunity where others see obstacles. A recession is a great example. Recession means unemployment, difficulty paying bills, fewer customers, home and business foreclosures, and cost cutting in different areas for individuals a..
Calculate level of output worker at golden rule steady state : Consider a Solow economy with the following Cobb-Douglas production function: The capital share of output (a) is 25%, population growth (n) is 1.5%, and the depreciation rate (δ) is 4%. The economy is in steady-state with a growth rate of output per ..
Inherent problems involved in discussing the notion : What are some of the inherent problems involved in discussing the notion that there is a single standard for the “American family?”
Natural monopolist is forced to price at marginal cost : If a natural monopolist is forced to price at marginal cost, does surplus increase or decrease and why? I thought that consumer surplus increased more than the producer lost because now production would be where MC crosses D rather than where MC cros..
Changes in the federal funds interest rate : Changes in the federal funds interest rate often lead to similar changes in the prime interest rate
Government spending : The federal debt keeps rising every year and has changed from a moral responsibility to a tool used in economic policy. Government spending is used for everything from Medicare and Medicaid to buying books for underprivileged schools.
Making decisions are held by lower-level employees : Assuming that the information required making decisions are held by lower-level employees, it makes sense to delegate decision authority to these employees. But, there must be trade-offs (because there always are). Speculate on the “costs” of delegat..
Markets in coordinating economic activity : Give two examples, the first of a case where firms have a particular advantage over markets in coordinating economic activity, and the second where firms have a distinct disadvantage

Reviews

Write a Review

Business Economics Questions & Answers

  1 what is the impact of a tax cut in an economy operating

1 what is the impact of a tax cut in an economy operating under a flexible exchange rate regime on household spending

  Identify what change to the money supply

Define and explain the money multiplier. Identify the change to the money supply in the following situation: The required reserve ratio is 12.5 percent and the Fed increases the monetary base by $100.

  Increase in confidence affect the value of the dollar

Elucidate how would this increase in confidence affect the value of the dollar. Elucidate how would it affect the trade deficit.

  If the government removes a tax on a good

If the government removes a tax on a good, then the price paid by buyers will

  Totally eliminate risks of accidents and deaths

Use economic analysis to explain why the optimal amount of product safety may be less than the amount that would totally eliminate risks of accidents and deaths. Use automobiles as an example.

  Firm adopting a long-term cost-reduction strategy

Which of the following is critical for a firm adopting a long-term cost-reduction strategy?

  Calculate the profit maximizing output and price

Elucidate how on your diagram also calculate the profit maximizing output also price. Calculate the consumer surplus at the profit maximizing price also quantity.

  Marginal cost-what is the profit-maximizing price

Suppose you have 10 individuals with values {$1, $2, $3, $4, $5, $6, $7, $8, $9, $10}. Your marginal cost of production is $2.50. What is the profit-maximizing price?

  Describe atleast ways in which a firm can limit a worker

Describe atleast 4 ways in which a firm can limit a worker's shirking. Ground your answer in an explicit theoretical framework(that you clearly state) that explains worker shirking behaviour.

  Determine the equivalent present worth-annual series amounts

A total of $400,000 will be deposited one year from now for the gas pipeline maintenance in the area. They estimate that the deposit amount will increase by $80,000 per year for 6 years thereafter, determine the equivalent: (a) Present worth and (b) ..

  The economy is in long-run equilibrium

Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billion to the left. The government wants to change spending to offset this decrease in demand. The MPC is 0.75.

  How can these leaders use their control over current taxes

How can these leaders use their control over current taxes, subsidies and government debt to force their successors to reduce steady -state government expenditures below 900,000 goods.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd