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

  Four major competitors in the computer work-station

Find the value of the test statistic (to 3 dec pl). Can we conclude that the proportions have changed during the year.

  Repay the entire principal in addition to interest payment

borrow 1000 at t=0. Make exact interest only payments at the end of each year for 4 years and at the end of the 4th year repay the entire principal in addition to the last interest payment. borrow 10000 at t=0. Pay a principal payment each year of 25..

  Rocky mountain region visited yellowstone park

Study by the National Park Service revealed that 50 percent of vacationers going to the Rocky Mountain region visited Yellowstone Park, 40 percent visit the Tetons, and 35 percent visit both.

  GDP consists of cranberries and maple syrup

In the country of Mainia, GDP consists of cranberries and maple syrup. In 2000, 50 units of cranberries are sold at $10 per unit, and 100 units of maple syrup are sold at $5 per unit. If the price of cranberries was $5 per unit and the price of maple..

  What way the us trucking industry exemplified the capture

what way the U.S trucking industry exemplified the capture theory hypothesis of government regulation prior to the capture theory hypothesis of government regulation prior to the passage of the Motor Carrier Act of 1980

  Marginal revenue product of the second unit of factor

When a perfectly competitive firm (that sells its good for $18 per unit) hires 1 unit of factor X it produces 35 units of output and when it hires 2 units of factor X it produces 55 units of output. Marginal revenue product of the second unit of fact..

  Decreasing order of the likely discount rate

Question 1: People clearly discount the future, relative to the present. But they may discount certain things more than others. Arrange the following in decreasing order of the likely discount rate. After you have made your list, write a few senten..

  Buying your first home

Suppose that you are buying your first home. Current interest rates on a 30-year fixed-rate mortgage are 5 percent, since lenders expect an inflation rate of 2 percent over the next 30 years, thus ensuring them a real return of 3 percent. If actual i..

  Countrys maximum consumption of lattes-pizzas per day

"Suppose that a worker in Larztopia can produce either 8 lattes or 2 pizzas per day, while a worker in Whiteland can produce 4 lattes or 8 pizzas per day. Each nation has 100 workers. Also suppose that each country completely specializes in producing..

  Worlds largest economies and policymakers

The economys business cycles are not well synchronized with any of the world's largest economies and policymakers.

  What price of computers the two countries might trade

Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts or 10 computers. Explain at what price of computers (in terms of shirts) the two countries might trade.

  Find the 90% confidence interval for the compensation

Find the 90% confidence interval for the compensation of a year when the productivity is 85 and interpret the CI.

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