PROBLEMS 271 “1 Minnie's European Mineral Springs, a single-price ‘monopoly, faces the market demand schedule: Pri Quantity demanded (euros per bot) thottes! 10 0 8 1 6 2 4 3 2 4 0 5 @ Calculate the total revenue schedule for Minnie's ‘European Mineral Springs. b Calculate the marginal revenue schedule. 2 Danny's Diamond Mines, a single-price monopoly, faces the market demand schedule: 2 Calculate the total revenue schedule for Danny's Calculate the marginal revenue schedule. **3. Minnic’s European Mineral Springs in problem 1 has the following total cost ‘Quantity produced Total cost otties! (euros! ° 1 1 3 2 7 3 13 ‘ a 5 a1 @ Calculate the marginal cost of producing each ‘outpat listed in the table. “Solutions to odd-numbered problems are avaiable on Parkin Ineractve. 5 b Calculate the profit-maxit © Calculate economic profit, 1g output and price, d Does Minnie's European Mineral Springs use Feseurces fccnfiy? Explnn yowrsarwce Danny's Diamond Mines in problem 2 has the follow- ing total cos: ‘Quantity produced Total cost (siamonds por day! (euros) 1 4220 2 11300 a 11400 ‘ 11520 Calculate the marginal cost of producing exch ‘output listed in the table, b Calculate the profit- maximizing output and price. © Calculate economic profit, d Does Danny's Diamond Mine use resources efficiently? Explain your answer. “The figure illustrates the situation facing the publisher of the only newspaper containing local news in an isolated UK community ° 100 700300400500 Qvoniy rewspapers per day) ‘@ What quantity of newspapers will maximize the publisher's profi? b What price will the publisher charge? (© Whatis the publisher's daily total revenue? At the price charged for a newspaper, is the ‘demand elastic or inelastic? Why? © Might the newspaper try to price discriminate? Why or why not?272 6 "7 CHAPTER 12 MONOPOLY ‘The figure illustrates the situation facing the only coffee har in an isolated community : ye i 3 A z : > rr Goan (eos per how) 8 What isthe quantity of coffee that will maximize the firm's profi? 1b What price will the coffee bar charge? © What is the coffee bar's daily total revenue? d Av the price charged for a coffee, is the demand clastic or inelastic? Why’? © Might the coffee bar try to price discriminate? Explain why or why not. ‘The figue illustrates the situation facing @ natural ‘monopoly that eannot price discriminate: ot 2 a 4 5 Quon (eubie meres er dey) ‘What quantity will the frm produce and what will be the deadweight loss if the firm is: An unregulated profit maximizer? Regulated to earn normal profi? © Regulated tobe efficient? Fin problem 7 marginal cost doubles, what now are {your answers? Study Reading Between the Lines on pp. 268-269 and then answer the following questions: @ Why is eBay a monopoly but Google not a monopoly? b How would you regulate the Internet search engine business to ensure that resources are used. efficiently? © How would you regulate the Internet auction busi ‘ess to ensue that resources are used efficiently? d “Anyone is fre to buy stock in eBay, so everyone is free to share in eBay’s economic profit, and the bigger that economic profit, the better for al.” Evaluate this statement. Use the links on Parkin Interactive to work the following. exercises. ‘Study the market for computer chips, then answer the following questions Is it conect to call Intel a monopoly? Explain why or why not 1b How does Intel wy to raise barsiers to entry in this market? (Obtain information on Microsoft then answer the fo- lowing questions. Is it correct to call Microsoft a monopoly? Explain, why or why not. b How do you think that Microsoft set the price of Windows 98 and decided how maay copies of the program to produce? © How is the expanding take up of Linux, the main allemative operating system to Windows, affecting Microsomt? d How is the constant threat of virus attacks on. Windows affecting Microsoft? © “Anyone is free to buy shares in Microsoft, so everyone is free to share in Microsoft's economic profit, and the bigger that economic profit, the ‘etter forall.” Evaluate this statement