Question

1. Consider a monopolist where the market demand curve for the produce is given by P...

1. Consider a monopolist where the market demand curve for the produce is given by P = 520 - 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50. (Does not need to be done. Only here for reference)

2. Suppose this monopolist from Problem #1 is regulated (i.e. forced to behave like a perfect competition firm) and the price is set to marginal cost and demand is set to supply to find equilibrium quantity.

  1. This regulated firm’s profit maximizing output is =

  2. This regulated firm’s profit maximizing price is =

  3. This regulated firm’s profit maximizing profit is =

  4. This regulated firm’s profit maximizing consumer surplus is =

Homework Answers

Answer #1

Ans.2.

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