True or False: Without government regulation, natural monopolies can earn positive profit in the short run. True False Solution
Since a monopolist is the sole producer, itsdemand curveis the market demand curve i.e. a downward-sloping demand curve. As shown in the graph below, a monopolist’s marginal revenue is less than its price. Marginal revenueof a monopolist (MM) is given by the following equation: ...
Imperfect competition: This graph shows the short run equilibrium for a monopoly. The gray box illustrates the abnormal profit, although the firm could easily be losing money. A monopoly is an imperfect market that restricts the output in an attempt to maximize its profits. Understanding and Findi...
In short, the government can provide financial support via subsidies to new entrants to ensure the competitive environment is more equitable. As with most regulatory approaches, none of these are perfect solutions and consolidation within industries conducive to a natural monopoly will continue to ...
The Monopolist’s Demand Curve and Marginal Revenue As a result, the monopolist produces less and sells its output at a higher price than a perfectly competitive industry would. It earns a profit in the short run and the long run.
These types of monopolies are often short-lived. It is challenging to maintain a technological advantage in the long-run since your competitors will have time to invest in improving their technology. For example, Apple's iPad accounts for 70% to 80% of tablet sales in North America in ...
Tables that were only used for short periods of time during in-game events. While on-demand tables were useful for launching the game, we faced a few challenges over time that we’ve since learned to solve for: Prewarming “Hot second” ...
We show that in the short-run equilibrium the regulator does a¤ect monopoly pricing and pro…ts (see the subsection 6.2). More speci…cally, it is socially optimal to set an X that is not large in order to avoid fully eradicating piracy since it restrains monopoly pricing. From the ...
This generates profit for the monopolist in the short run and long run. Profits will not persist in the long run unless there is a barrier to entry. This can take the form of: control of natural resources or inputs increasing return 9、s to scale technological superiority government-created...
Monopoly firm may get abnormal profits, suffer losses or break-even in the short run. In the long run, a monopoly firm does get profits. For protecting its profits, the monopoly firm resorts to entry barriers.Answer and Explanation: In...