Futures Unlimited Corporation: Cost of Producing Gloves

Futures Unlimited Corporation
Name
Affiliation/Institution
Date
Futures Unlimited Corporation
Part A
1 Describe the economic outcome of this single-price monopoly in terms of profit. Provide one (1) supporting fact to support your response.
A single-price monopoly simply denotes a situation where a single firm sells the units of its output at the same price to all of its customers. This is an advantage as well as a disadvantage to firms that enjoy it. First of all, a firm with this type of monopoly is able to control the market and dictate the price ranges of a particular product. This means that such a firm can as well hike prices for their own profitability agenda. Consumers are often at a loss because they get to bear the burden of higher prices.
On the other hand, a single-price monopoly could be a disadvantage. Single-price monopoly strips a firm the advantage of price discrimination (Mankiw, 2009). Price discrimination gifts a firm with the opportunity to maximize their sales and profits by selling the same product at different prices. Single-price monopoly strips firms this advantage. Regardless of the market, a single-price monopoly firm is expected to offer its product at the same price. This limits the profit that could be made.
2 Describe one (1) way that the Futures Unlimited Corporation makes output and price decisions.
First of all, being a monopoly gifts Futures Unlimited Corporation an advantage. Monopolies control the market prices as well as output. One way that Futures Unlimited Corporation makes their price and output decisions is based on their profit margins. It is possible for a monopoly like Futures Unlimited Corporation to decrease its output and create a temporary shortage of the product and then charge higher prices. This always happens and is often motivated by profit projections. Profit projections can influence the price and output decisions that Futures Unlimited Corporations makes.
Part B
1 Would consumers benefit more from a tariff or quota on imports? Provide one (1) supporting fact to support your response.
A tariff is a tax that is often levied on imports while a quota represents a legal numerical limit that is often imposed by governments on the amount of goods that may be imported. Tariffs are employed for purposes of revenue on the part of the governments. However, for quotas, they are employed to help protect indigenous or domestic industries from unfair competition or just competition from foreign industries.
Consumers would benefit more from tariffs than they would ben...