KAPLAN AB224 - Unit 9 Assignment Monopoly Pricing
Question # 00398884
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Updated on: 10/03/2016 03:03 AM Due on: 10/03/2016
Unit 9
AB224 | Microeconomics
Unit 9 Assignment: Monopoly Pricing
Name:
Course Number and Section: AB224–0X
Date:
General Instructions for all Assignments
1. Unless specified differently by your course instructor, save this assignment template to your
computer with the following file naming format: Course number_section number_Last_First_unit
number
2. At the top of the template, insert the appropriate information: Your Name, Course Number and
Section, and the Date
3. Insert your answers below, or in the appropriate space provided for in the question. Your answers
should follow APA format with citations to your sources and, at the bottom of your last page, a list of
references. Your answers should also be in Standard English with correct spelling, punctuation,
grammar, and style (double spaced, in Times New Roman, 12–point, and black font). Respond to
questions in a thorough manner, providing specific examples of concepts, topics, definitions, and
other elements asked for in the questions.
4. Upload the completed Assignment to the appropriate Dropbox.
5. Any questions about the Assignment, or format questions, should be directed to your course
instructor.
Assignment
In this Assignment, you will demonstrate your understanding of monopoly pricing, based on different
management criteria, the impact of price regulation of monopolies, and provide detailed explanations
of how price effect and quantity effect cause marginal revenue to be different from the price.
Questions
1. The Gulf Sea Turtle Conservation Group (GSTCG), a 501(c) (3) non–profit group of volunteers
working to collect data on nesting sea turtles and to promote sea turtle conservation, is
considering creating a video to educate people about sea turtle conservation. The cost of
duplicating the video on a DVD and mailing the DVD is $6.58. In a GSTCG member meeting, the
video plan was discussed. Table 1. shows the expected demand for the DVD at different
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Unit 9
AB224 | Microeconomics
suggested donation levels, and they can act as a single-price monopolist if they choose to. The
receipts will be used to fund GSTCG supplies for their data collection and conservation work. At
the end of each sea turtle nesting season, any excess funds are donated by the GSTCG to a local
non-profit sea turtle research and rehabilitation facility.
Table 1.
Suggested
Donation per
DVD Request
Anticipated
Number of DVD
Requests
$19.00
0
$15.00
2
$9.50
4
$7.75
10
$3.00
15
$0.00
20
a. Complete Table 2. by computing the Total Revenue, Marginal Revenue, and Profit
columns.
Table 2.
Suggested
Donation per
DVD Request
Anticipated
Number of DVD
Requests
$19.00
0
$15.00
2
$9.50
4
$7.75
10
$3.00
15
$0.00
20
Total
Revenue
Marginal
Revenue
PROFIT
b. The President wants the GSTCG to provide videos to generate the most possible donations
(Total Revenue). What price is the President of the GSTCG favoring and how many people
will receive the DVD if this becomes the price of the suggested donation? Explain your
answers.
2 of 8
Unit 9
AB224 | Microeconomics
c. The Education Outreach Committee wants the GSTCG to provide videos to the most
possible number of people. What price is the Educational Outreach Committee favoring and
how many people will receive the DVD if this becomes the price of the suggested donation?
Explain your answers.
d. The Treasurer of the GSTCG wants the DVD program to be as efficient as possible so that
the marginal revenue equals marginal cost. What price is the Treasurer favoring and how
many people will receive the DVD if this becomes the price of the suggested donation?
Explain your answers.
e. The Fund Raising Committee wants the DVD program to generate as much profit in
donations as possible. What price is the Fund Raising Committee favoring and how many
people will receive the DVD if this becomes the price of the suggested donation? Explain
your answers.
2. A business has been created to provide needed services to its market. As the only provider of this
service, it functions as a monopoly, with the ability to set prices and having the entire market
demand schedule as its demand curve. Because the monopoly is newly formed, there is no
government intervention into the monopoly’s pricing actions. Examine Diagram 2. and answer each
of the following questions with complete explanations:
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Unit 9
AB224 | Microeconomics
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. What is the value at point (c) and why is it important?
d. What is the value at point (d) and why is it important?
e. What is the meaning of the green rectangle labeled (e)?
f. If there were no monopoly and this was a perfectly competitive market, what would quantity
at point (f) be and why is it important?
g. If there were no monopoly and this was a perfectly competitive market, what would point (g)
be and why is it important?
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AB224 | Microeconomics
h. For the market in which the monopoly now operates, what does the red triangle labeled (h)
mean, and why is it important?
3. A governmental regulating agency was created to oversee the monopoly in Question 2’s operations
and pricing. Diagram 3. depicts a new price ceiling set by the regulators. Answer each of the
following questions with complete explanations:
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. At what level was the price ceiling set?
d. What is the value at point (c) and why is it important?
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AB224 | Microeconomics
e. At this price ceiling level, will the monopoly make any monopoly profits?
f. At this price ceiling level, will the monopoly cover its costs?
g. At this price ceiling level, will the monopoly continue in business in the long run?
4. Diagram 4. depicts a different price ceiling set by the regulators for the monopoly in Question 2.
Answer each of the following questions with complete explanations:
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. At what level was the price ceiling set?
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AB224 | Microeconomics
d. At this price ceiling level, will the monopoly make any monopoly profits?
e. At this price ceiling level, will the monopoly cover its costs?
f. At this price ceiling level, will the monopoly continue in business in the long run?
5. Explain your understanding of how price effect contributes to the fact that, for a monopoly, marginal
revenue is always less than the price.
6. Explain your understanding of how quantity effect contributes to the fact that, for a monopoly,
marginal revenue is always less than the price.
------------------------------References:
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Unit 9
AB224 | Microeconomics
Unit 9 Assignment: Monopoly Pricing Grading Rubric:
Percent
Possible
Points
Possible
Full Assignment
100%
40
Overall Writing:
20%
8
Content
Correct coversheet information at the top of 1st page
5%
2.00
APA format for answers
3%
1.20
Correct citations
3%
1.20
Standard English no errors
4%
1.60
At least one, or more, references
5%
2.00
Answers: provides complete information demonstrating
analysis and critical thinking:
80%
32
Individual Questions:
1. a. Computer TR, MR and Profit
5%
2.00
1. b. Most donations
3%
1.20
1. c. Most people get DVD's
3%
1.20
1. d. Most efficient price
4%
1.60
1. e. Most profit
3%
1.20
2. a.–h. Evaluate monopoly – no price ceiling
16%
6.40
3. a.–g. Evaluate monopoly – 1st price ceiling
14%
5.60
4. a.–f. Evaluate monopoly – 2nd price ceiling
12%
4.80
5. Explain price effect and MR not equal price
10%
4.00
6. Explain quantity effect and MR not equal price
10%
4.00
80%
32
Sub-total for Individual Questions:
8 of 8
Unit 9
AB224 | Microeconomics
AB224 | Microeconomics
Unit 9 Assignment: Monopoly Pricing
Name:
Course Number and Section: AB224–0X
Date:
General Instructions for all Assignments
1. Unless specified differently by your course instructor, save this assignment template to your
computer with the following file naming format: Course number_section number_Last_First_unit
number
2. At the top of the template, insert the appropriate information: Your Name, Course Number and
Section, and the Date
3. Insert your answers below, or in the appropriate space provided for in the question. Your answers
should follow APA format with citations to your sources and, at the bottom of your last page, a list of
references. Your answers should also be in Standard English with correct spelling, punctuation,
grammar, and style (double spaced, in Times New Roman, 12–point, and black font). Respond to
questions in a thorough manner, providing specific examples of concepts, topics, definitions, and
other elements asked for in the questions.
4. Upload the completed Assignment to the appropriate Dropbox.
5. Any questions about the Assignment, or format questions, should be directed to your course
instructor.
Assignment
In this Assignment, you will demonstrate your understanding of monopoly pricing, based on different
management criteria, the impact of price regulation of monopolies, and provide detailed explanations
of how price effect and quantity effect cause marginal revenue to be different from the price.
Questions
1. The Gulf Sea Turtle Conservation Group (GSTCG), a 501(c) (3) non–profit group of volunteers
working to collect data on nesting sea turtles and to promote sea turtle conservation, is
considering creating a video to educate people about sea turtle conservation. The cost of
duplicating the video on a DVD and mailing the DVD is $6.58. In a GSTCG member meeting, the
video plan was discussed. Table 1. shows the expected demand for the DVD at different
1 of 8
Unit 9
AB224 | Microeconomics
suggested donation levels, and they can act as a single-price monopolist if they choose to. The
receipts will be used to fund GSTCG supplies for their data collection and conservation work. At
the end of each sea turtle nesting season, any excess funds are donated by the GSTCG to a local
non-profit sea turtle research and rehabilitation facility.
Table 1.
Suggested
Donation per
DVD Request
Anticipated
Number of DVD
Requests
$19.00
0
$15.00
2
$9.50
4
$7.75
10
$3.00
15
$0.00
20
a. Complete Table 2. by computing the Total Revenue, Marginal Revenue, and Profit
columns.
Table 2.
Suggested
Donation per
DVD Request
Anticipated
Number of DVD
Requests
$19.00
0
$15.00
2
$9.50
4
$7.75
10
$3.00
15
$0.00
20
Total
Revenue
Marginal
Revenue
PROFIT
b. The President wants the GSTCG to provide videos to generate the most possible donations
(Total Revenue). What price is the President of the GSTCG favoring and how many people
will receive the DVD if this becomes the price of the suggested donation? Explain your
answers.
2 of 8
Unit 9
AB224 | Microeconomics
c. The Education Outreach Committee wants the GSTCG to provide videos to the most
possible number of people. What price is the Educational Outreach Committee favoring and
how many people will receive the DVD if this becomes the price of the suggested donation?
Explain your answers.
d. The Treasurer of the GSTCG wants the DVD program to be as efficient as possible so that
the marginal revenue equals marginal cost. What price is the Treasurer favoring and how
many people will receive the DVD if this becomes the price of the suggested donation?
Explain your answers.
e. The Fund Raising Committee wants the DVD program to generate as much profit in
donations as possible. What price is the Fund Raising Committee favoring and how many
people will receive the DVD if this becomes the price of the suggested donation? Explain
your answers.
2. A business has been created to provide needed services to its market. As the only provider of this
service, it functions as a monopoly, with the ability to set prices and having the entire market
demand schedule as its demand curve. Because the monopoly is newly formed, there is no
government intervention into the monopoly’s pricing actions. Examine Diagram 2. and answer each
of the following questions with complete explanations:
3 of 8
Unit 9
AB224 | Microeconomics
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. What is the value at point (c) and why is it important?
d. What is the value at point (d) and why is it important?
e. What is the meaning of the green rectangle labeled (e)?
f. If there were no monopoly and this was a perfectly competitive market, what would quantity
at point (f) be and why is it important?
g. If there were no monopoly and this was a perfectly competitive market, what would point (g)
be and why is it important?
4 of 8
Unit 9
AB224 | Microeconomics
h. For the market in which the monopoly now operates, what does the red triangle labeled (h)
mean, and why is it important?
3. A governmental regulating agency was created to oversee the monopoly in Question 2’s operations
and pricing. Diagram 3. depicts a new price ceiling set by the regulators. Answer each of the
following questions with complete explanations:
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. At what level was the price ceiling set?
d. What is the value at point (c) and why is it important?
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AB224 | Microeconomics
e. At this price ceiling level, will the monopoly make any monopoly profits?
f. At this price ceiling level, will the monopoly cover its costs?
g. At this price ceiling level, will the monopoly continue in business in the long run?
4. Diagram 4. depicts a different price ceiling set by the regulators for the monopoly in Question 2.
Answer each of the following questions with complete explanations:
a. What is quantity (a) and why is it important?
b. What is the value at point (b) and why is it important?
c. At what level was the price ceiling set?
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Unit 9
AB224 | Microeconomics
d. At this price ceiling level, will the monopoly make any monopoly profits?
e. At this price ceiling level, will the monopoly cover its costs?
f. At this price ceiling level, will the monopoly continue in business in the long run?
5. Explain your understanding of how price effect contributes to the fact that, for a monopoly, marginal
revenue is always less than the price.
6. Explain your understanding of how quantity effect contributes to the fact that, for a monopoly,
marginal revenue is always less than the price.
------------------------------References:
7 of 8
Unit 9
AB224 | Microeconomics
Unit 9 Assignment: Monopoly Pricing Grading Rubric:
Percent
Possible
Points
Possible
Full Assignment
100%
40
Overall Writing:
20%
8
Content
Correct coversheet information at the top of 1st page
5%
2.00
APA format for answers
3%
1.20
Correct citations
3%
1.20
Standard English no errors
4%
1.60
At least one, or more, references
5%
2.00
Answers: provides complete information demonstrating
analysis and critical thinking:
80%
32
Individual Questions:
1. a. Computer TR, MR and Profit
5%
2.00
1. b. Most donations
3%
1.20
1. c. Most people get DVD's
3%
1.20
1. d. Most efficient price
4%
1.60
1. e. Most profit
3%
1.20
2. a.–h. Evaluate monopoly – no price ceiling
16%
6.40
3. a.–g. Evaluate monopoly – 1st price ceiling
14%
5.60
4. a.–f. Evaluate monopoly – 2nd price ceiling
12%
4.80
5. Explain price effect and MR not equal price
10%
4.00
6. Explain quantity effect and MR not equal price
10%
4.00
80%
32
Sub-total for Individual Questions:
8 of 8
Unit 9
AB224 | Microeconomics
-
Rating:
/5
Solution: KAPLAN AB224 - Unit 9 Assignment Monopoly Pricing