Question : 21) Refer to Figure 10-9. If the government regulates Erickson : 1266845

 

21) Refer to Figure 10-9. If the government regulates Erickson Power Company so that the firm can earn a normal profit, the price would be set at ________ and the output level is ________.

A) P1, Q4

B) P2, Q3

C) P2, Q2

D) P3, Q2

22) Refer to Figure 10-9. What is the economically efficient output level and what is the price at that level?

A)  Q4, P1

B) Q3, P2

C) Q2, P2

D) Q2, P3

23) Refer to Figure 10-9. Why won’t regulators require that Erickson Power produce the economically efficient output level? 

A) because there is insufficient demand at that output level

B) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers’ marginal value for that last unit

C) because Erickson Power will earn zero profit

D) because Erickson Power will sustain persistent losses and will not continue in business in the long run.

24) Economic efficiency requires that a natural monopoly’s price be

A) equal to average total cost where it intersects the demand curve.

B) equal to marginal cost where it intersects the demand curve.

C) equal to average variable cost where it intersects the demand curve.

D) equal to the lowest price the firm can charge and still make a normal profit.

25) In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price

A) equal to average total cost where it intersects the demand curve.

B) equal to marginal cost where it intersects the demand curve.

C) equal to average variable cost where it intersects the demand curve.

D) corresponding to the demand curve where marginal revenue equals zero.

 

 

In 2011, Verizon was granted permission to enter the market for cable TV in Upstate New York, ending the virtual monopoly that Time Warner Cable had in most local communities in the region. Figure 10-7 shows the cable television market in Upstate New York.

 

26) Refer to Figure 10-7. Following the entry of Verizon, the subscription price falls from PM to PC.  What is the increase in consumer surplus as a result of this change? 

A) the area A + B + C

B) the area B + C

C) the area D + F

D) the area B + C + D

27) Refer to Figure 10-7. What is the size of the deadweight loss prior to Verizon entering the market and what happens to this deadweight loss after Verizon does enter the market?

A) The deadweight loss of area D is converted to consumer surplus.

B) The deadweight loss of area C+D is converted to consumer surplus

C) The deadweight loss of area D is converted to producer surplus.

D) The total deadweight loss is the area D+F; D is converted to consumer surplus and F to producer surplus.

28) A product’s price approaches its marginal cost as market concentration increases.

29) A vertical merger is one that takes place between two companies producing different goods or services for one specific finished product.

30) Holding everything else constant, government approval of horizontal mergers is more likely to be granted if the “market” that firms are in are broadly defined rather than narrowly defined.

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more