Microeconomics Homework help

Price: $15 USD

Question description

Assume that in the independent nation of Qari sugar production is controlled by a sugar monopoly, SugarCo, which earns economic profits. There are well over a million buyers of sugar in Qari but only one seller of sugar. Imports of sugar are forbidden. 

a. In what type of market structure does SugarCo compete? List and briefly explain the characteristics of this market structure. 

b. Draw a graph that shows the determination of the profit maximizing price and quantity of sugar in SugarCo. 

· Label the profit maximizing price as "Ppm" and the quantity produced as "Qpm." 

· Shade in the area of economic profits. 

· Outline or shade in the deadweight loss. 

c. Neighboring nation Nari now invades Qari and topples its government. SugarCo is destroyed and the sugar market is broken into hundreds of competing firms, all selling an identical product. In what type of market structure do these new firms now compete? List and briefly explain the characteristics of this new market type. 

d. How will the price and quantity sold in this new market (part c) differ from the price and quantity you determined in part b, above? Redraw the graph from part b but show the price and quantity from part b and the price and quantity from part c. 

e. SugarCo was the sole employer of sugar workers. What will happen to the wages of sugar workers once the sugar industry becomes competitive?

Tutor Answer

(Top Tutor) Daniel C.
School: Rice University
Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1820 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors