Telecommunications lobbied both parties to pass the 1996 Telecommunications act which essentially handed near-monopoly control of the media to ____ corporations.
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Telecommunications lobbied both parties to pass the 1996 Telecommunications act which essentially handed near-
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- How has deregulation in the telecommunications industry impacted competition and consumer outcomes?When the old AT&T had a virtual monopoly on long distance service, it created a rate structure that had high prices M-F 8 am to 5 pm, medium prices M-F 5:01 pm – 11 pm, and low prices M-F 11:01 pm -7:59 am and all-day weekends and holidays. How might the differences in elasticities for business phone users and household phone users explain this rate structure?The figure to the right shows the market demand for electricity and the average total cost and marginal cost of producing electricity for a utility company. Suppose the utility company is a regulated natural monopoly. If government regulators want to achieve economic efficiency, then they will regulate a price of $ —— per kilowatt hour. (Enter a numeric response using a real number rounded to two decimal places.)
- Advantages and disadvantages of a state owned monopoly enterpriseIf public utilities are a natural monopoly, what would be the danger in deregulating them?Genentech owns a patent on tissue plasminogen activator (TPA), which is an enzyme that helps the body break down blood clots. TPA is particularly valuable to cardiac patients, since it often allows heart problems to be treated with medication rather than surgery. Recently, however, firms in the medical industry have come under fire by some members of Congress and the press for charging high prices and earning monopoly profits. a. If the government stripped Genentech and other pharmaceutical firms of their patents, do you think cardiac patients would benefit? Why?
- Consider the only electric company in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for electricity services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. PRICE (Dollars per subscription 100 90 80 10 0 0 2 MR 8 11 4 10 12 14 QUANTITY (Thousands of subscriptions) 16 ATC MC 18 20 (?)Consider the only internet service provider in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for internet services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. PRICE (Dollars per subscription) 100 90 80 70 40 20 10 0 0 2 || Pricing Mechanism Profit Maximization 4 Complete the first row of the following table. MR 8 10 12 14 QUANTITY (Thousands of subscriptions) Marginal-Cost Pricing Average-Cost Pricing O True Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits. O False 16 ATC -MC Complete the third row of the previous table. 18 20 D Short Run Price Quantity (Subscriptions) (Dollars per subscription) Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Profit Complete the second row of the…Fill-up the following table relating to monopoly operations and regulations given the following total cost and inverse demand functions: Total Cost: TC = Q2 + 100;Inverse Demand: P = 120 – Q No regulation MC-Pricing (MC=P*) w/ Lump Sum Tax (T=75) w/ Specific Tax (t=10) Profit Equation Q* P* TR at Q* TC at Q* Profit at Q* Tax Revenue Consumer Surplus Producer Surplus Deadweight loss 2. Choose one type of regulation you analyzed in #1 and graphically illustrate the results.
- Fill-up the following table relating to monopoly operations and regulations given the following total cost and inverse demand functions: Total Cost: TC = Q2 + 100;Inverse Demand: P = 120 – Q No regulation MC-Pricing (MC=P*) w/ Lump Sum Tax (T=75) w/ Specific Tax (t=10) Profit Equation 120Q-2Q2-Q2-100 120Q-2Q2-Q2-100 120Q-2Q2-Q2-100-75 120Q-2Q2-Q2-100-10Q Q* 30 40 30 27.5 P* 90 80 90 92.5 TR at Q* 2700 3200 2700 2543.75 TC at Q* 1000 1700 1075 1131.25 Profit at Q* 1700 1500 1625 1412.5 Tax Revenue Nil Nil 75 275 Consumer Surplus 450 800 450 756.25 Producer Surplus 1800 3200 1800 1512.5 Deadweight loss 150 Nil 150 125.95 Choose one type of regulation you analyzed and graphically illustrate the results.Give an example of a government-created monopoly. Is the creation of this monopoly necessarily good or bad public policy?How would a manufacturer of automobile parts for the secondary market benefit from the addition of another channel of distribution to the three‐level channel it now uses?