Question

A resource firm faces the following demand function: P = 60 – 10Q. The marginal cost of extraction is $20. (MC = $20).

Using the Inverse Elasticity Pricing Rule, calculate the profit maximizing output level and price.

Answer #1

A monopoly faces the following inverse demand function:
p(q)=100-2q, the marginal cost is $10 per unit.
What is the profit maximizing level of output, q*
What is the profit maximizing price
what is the socially optimal price
What is the socially optimal level of output?
What is the deadweight loss due to monopoly's profit maximizing
price?

A monopolist faces the inverse demand function p = 300 – Q.
Their cost function is c (Q) = 25 + 50Q. Calculate the profit
maximizing price output combination

1) The inverse demand curve a monopoly faces
is
p=110−2Q.
The firm's cost curve is
C(Q)=30+6Q.
What is the profit-maximizing solution?
2) The inverse demand curve a monopoly faces
is
p=10Q-1/2
The firm's cost curve is
C(Q)=5Q.
What is the profit-maximizing solution?
3) Suppose that the inverse demand function for
a monopolist's product is
p = 7 - Q/20
Its cost function is
C = 8 + 14Q - 4Q2 + 2Q3/3
Marginal revenue equals marginal cost when output
equals...

Suppose that a firm faces the following demand function: Qd(P) =
7225 - 425P Assuming that MC=9 Calculate the profit maximizing
quantity (Q*)

Consider a firm with the demand function P(Q)=(50-2Q), and the
total cost function TC(Q)=10,000+10Q. Find the profit maximizing
quantity. Calculate the profit maximizing price (or the market
price). Hint: MR(Q)=(50-4Q),

Consider the following total cost function for an individual
firm:
C(q) = 10+ q + (1/4)q^2
The industry demand is estimated to be:
Q = 100 - P
1) Now suppose there is a monopolist facing the industry demand.
Write down the monopolist's pro t function.
2) What is the equation of the monopolists marginal revenue
function? Also, explain how the monopolist's marginal revenue
function differs from the marginal revenue function of a firm in a
long-run perfectly competitive market....

Consider a total cost function of TC = 0.5Q^2 +10Q + 20 and the
market demand function Q=70-p.
a What is the profit-maximizing output and price for the perfect
competition? Calculate its profit.
b What is the profit-maximizing output and price for the
monopolist? Calculate its profit.
c What is the profit-maximizing output and price for the
monopolist in the second market? Calculate its profit.

A monopolist faces the following demand curve, marginal
revenue curve, total cost curve and marginal cost curve for its
product: Q = 200 - 2P
MR = 100 - Q
TC = 5Q MC = 5
a. What is the profit maximizing level of output?
b. What is the profit maximizing price? c. How much profit
does the monopolist earn?

1. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC = 2Q + 10. The firm's profit
maximizing output is
2. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC...

Suppose a monopolistic utility firm faces a market demand
featured by Q = 100 – P. It has a total cost function: TC = 2000 +
10Q. (You must show all steps of calculation. Without showing your
work, you get zero mark for even correct answers.) If there is no
regulation, what output level and price would be chosen by the
firm? Calculate the level of output Q*, price P*, and the
deadweight loss (DWL). If two-part pricing is used...

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