2. Imagine an island a short distance off the east coast of a country. This island is called Onus, and it has a population of about 500 residents. Their only way to the mainland is by the ONE ferry boat that runs between Onus and the mainland (the ferry operates as a monopoly). Similarly, a short distance off the west coast of the same country is another island, Yuri, with a similar population of about 500 residents. Yuri, however, is a tourist attraction. There are MANY ferry boats running between Yuri and the mainland (each ferry operating in this perfectly competitive market). Each Yuri ferry operator provides service to both the tourists and to the 500 west coast island residents. Using the information you learned in Chapter 13 of the text, answer the following questions by comparing and contrasting the differences between the monopoly market in Onus and the perfectly competitive market in Yuri. a. Using Figure la and Figure 2a, explain in detail what differences in demand that the monopoly ferry operator on the east coast island of Onus will experience compared to the demand that a single ferry operator will experience in the perfectly competitive west coast market of Yuri. Be sure to address the differences in the demand curves in the two different markets. (Enter your response here.) UNIT 9 BU224 ASSIGNMENT TEMPLATE Figure la $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 $45.00 Figure 1b $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 18 $5.00 50.00 19 36 ATITIKT Monopoly MR 5164 QUANTITY (Enter your response here.) 51 75 Monopoly MR QUANTITY 84 75 91 MR not equal D 04 MC 91 ATC AVC DE MC ATC AVC Figure 2a 06 $45.00 $40.00 b. Both the Onus ferry operator in the monopoly market and each Yuri ferry operator in the perfectly competitive market will want to produce at the point that the marginal revenue is equal to the marginal cost. Explain in detail how, due to the price effect and the quantity effect, the monopoly's marginal revenue will always be less than its price while the marginal revenue in the perfectly competitive market will always be equal to the market price. $35.00 $30.00 $25.00 $20.0 $15.00 $10.00 $5.00 $0.00 $45.00 Figure 2b $40.00 $35.00 $30.00 $25.00 $15.00 D $10.00 15 $20.00D & MR $5.00 $0.00 19 15 Firm In A Perfectly Competitive Market 36 10 64 51 QUANTITY 30 75 Firm In A Perfectly Competitive Market In Which The Equilibrium Price Is Equal To The Firm's Lowest ATC. 5164 QUANTITY G4 04 91 75 MC 01 ATC D AFC 90 MC ATC DAVC AFC 4 90