Figure 98 Figure 9

question 278

Essay

Figure 9.8 Figure 9.8 reflects the cost and revenue structure for a monopoly that has been in business for a very long time.
-Refer to Figure 9.8.Use the figure above to answer the following questions.
a. Identify the curves labelled A and B.Identify the curve which contains both point Y and point Z.Identify the curve which contains both point V and point W.
b.What is the profit-maximising quantity and what price will the monopolist charge?
c.What area represents total revenue at the profit-maximising output level?
d.What area represents total cost at the profit-maximising output level?
e.What area represents profit?
f.What is the profit per unit (average profit)at the profit-maximising output level?
g.If this industry was organised as a perfectly competitive industry, what would be the profit-maximising price and quantity?
h.What area represents the deadweight loss as a result of a monopoly?
__________________________________________________________________________________________________________________________________________________________________________________________

---

Definitions:

Standard Deviation

A measure of the dispersion or variability of a set of data points or investment returns, indicating the degree of risk or volatility.

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, typically represented by government bonds.

Capital Allocation Line

A line that graphically represents the risk-versus-return profile of risky assets, and indicates the optimal portfolio of risky and risk-free assets.

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, often represented by government bonds.