Tofit Maximization for Monopoly monopoly maximizes profit by hoosing the quantity at which narginal revenue equals marginal ost (point Al it then uses the lemand curve to find the price hat will induce consumers to buy hat quantity (point B). he Monopolist's Profit is found by (Price - Average Total Cost) he area EBCD in the graph. Since the Monopolists holds "Barriers to Entry" io other firms can enter the market and capture the profit. lence the unregulated The Monopolist faces three prices: he unregulated Monopolist will produce at the Monopoly Price (P=D)-Economic Profit he regulated Monopolist will produce at the Fair Return Price (P=ATC)Normal Profit he efficient Monopolist will produce at the Socially Optimal Price (P=MC)-Allocative Efficiency Your initial Post should have two components Using the Monopoly Graph above complete the following: 1. Identify the Price and Quantity of the unregulated Monopolist 2. Identify the Price and Quantity of the regulated Monopolist. 3. Identify the Price and Quantity of the efficient or Socially Optimal Monopolist. 12 nstrate your knowledge by constructing a scenario (real or made up) using one of the following: 1. Unregulated Monopolist 2. Regulated Monopolist 3. Socially Optimal Monopolist Examples: Unregulated Monopolist Martin "Pharma Bro" Shkreli obtained control of the AIDS drug Daraprim, and then hiked the price from $13.50 per pill to $750 per pill. Regulated Monopolist The local Water company is raising the price per gallon of water due to increased costs of the production and delivery of water. Socially Optimal Monopolist Genentech announces that it will sell its anti-cancer drug Wallop for the marginal cost of production to ensure maximum distribution. Discussion Question Requirements: Each student is required to post a 150 word response to the question. Tofit Maximization for Monopoly monopoly maximizes profit by hoosing the quantity at which narginal revenue equals marginal ost (point Al it then uses the lemand curve to find the price hat will induce consumers to buy hat quantity (point B). he Monopolist's Profit is found by (Price - Average Total Cost) he area EBCD in the graph. Since the Monopolists holds "Barriers to Entry" io other firms can enter the market and capture the profit. lence the unregulated The Monopolist faces three prices: he unregulated Monopolist will produce at the Monopoly Price (P=D)-Economic Profit he regulated Monopolist will produce at the Fair Return Price (P=ATC)Normal Profit he efficient Monopolist will produce at the Socially Optimal Price (P=MC)-Allocative Efficiency Your initial Post should have two components Using the Monopoly Graph above complete the following: 1. Identify the Price and Quantity of the unregulated Monopolist 2. Identify the Price and Quantity of the regulated Monopolist. 3. Identify the Price and Quantity of the efficient or Socially Optimal Monopolist. 12 nstrate your knowledge by constructing a scenario (real or made up) using one of the following: 1. Unregulated Monopolist 2. Regulated Monopolist 3. Socially Optimal Monopolist Examples: Unregulated Monopolist Martin "Pharma Bro" Shkreli obtained control of the AIDS drug Daraprim, and then hiked the price from $13.50 per pill to $750 per pill. Regulated Monopolist The local Water company is raising the price per gallon of water due to increased costs of the production and delivery of water. Socially Optimal Monopolist Genentech announces that it will sell its anti-cancer drug Wallop for the marginal cost of production to ensure maximum distribution. Discussion Question Requirements: Each student is required to post a 150 word response to the
