Question

The demand for mysterious good X in Lansing is Q = 12 ? P, where P is the price of good X per pound and Q is the quantity demanded in pounds. The marginal cost of producing the good is $2 per pound. There is no fixed cost of producing the good. There is only one firm, Alice, who can produce the good. Alice cannot price discriminate against any consumer. (a) What is the marginal revenue curve? (b) What is the monopoly quantity? (c) How much is the markup and what is the price elasticity of demand at the monopoly price? (d) How much is the consumer surplus? (e) How much is the producer surplus?

Answer #1

. The demand for mysterious good X in Lansing is Q = 12 ? P,
where P is the price of good X per pound and Q is the quantity
demanded in pounds. The marginal cost of producing the good is $2
per pound. There is no fixed cost of producing the good. There is
only one firm, Alice, who can produce the good. Alice can perfectly
price discriminate. Rather than naming the price for each quantity
sold, Alice uses...

Suppose the market demand function is Q = 120 – 2P, and the
marginal cost (in dollars) of producing the product is MC = Q,
where P is the price of the product and Q is the quantity demanded
and/or supplied.
How much would be supplied by a competitive market? (Hint: In a
perfect competition, the profit maximization condition is
MR=P=MC)
Compute the consumer surplus and producer surplus. Show that
the economic surplus is maximized.

A monopoly is facing inverse demand given by P = 40−0.5Q and
marginal cost given by MC = 7+0.1Q. Illustrate these on the graph
and answer the questions below.
(a) If the monopolist is unable to price discriminate, what is
the profit-maximizing quantity? What is the price? What is consumer
surplus? Producer surplus? Deadweight loss?
(b) Suppose instead the monopolist is able to perfectly price
discriminate. How many units will be sold? What is consumer
surplus? Producer surplus? Deadweight loss?

We are considering a monopoly facing the demand QD = 400−5P ⇔ P
= 80−0.2QD. Its marginal cost is MC = 0.2Q − 4. (a) Find the
monopolist’s marginal revenue equation. (b) Find the monopoly price
and quantity in the market and display them in a graph below. Q $
(c) Is this new quantity produced efficient? Explain (d) Suppose
the monopolist is able to perfectly price discriminate. What
quantity will it sell, at what price? (e) Calculate and compare...

If the marginal cost of production of a good is a positively
sloped function of the quantity supplied to the market and the
price of the good is a negatively sloped function of the quantity
demanded,
In a monopoly market price there will always be a dead-weight
loss compared to the result of a competitive market.
In a competitive market, the long-run equilibrium quantity
supplied and demanded will be the quantity at which long run
marginal cost and price are...

(a) Consider a monopoly market with the following demand
equation for a good Z.
P = 100 – 0.2 Q
Suppose fixed cost is zero and marginal cost is given by MC =
20.
Answer the following questions.
(i) Based on the information given, draw the diagram which shows
the marginal revenue (MR) curve, marginal cost (MC) curve and the
demand (D) curve of the monopoly. Show the value of X and Y
intercepts for these curves.
(ii) Explain why...

Suppose the marginal utilities from consuming good X and good Y
are MUx M U x = 20 and MUy M U y = 30, respectively. And prices of
good X and good Y are Px P x = $3 and Py P y = $4. Which of the
following statements is true?
Question 28 options:
The consumer could increase utility by giving up 1 unit of good
Y for 3/4 units of good X.
The consumer is receiving more...

The demand for a product is given by p = d ( q ) = − 0.8 q + 150
and the supply for the same product is given by p = s ( q ) = 5.2
q. For both functions, q is the quantity and p is
the price in dollars. Suppose the price is set artificially at $70
(which is below the equilibrium price).
a) Find the quantity supplied and the quantity demanded at this
price.
b)...

Suppose that the demand equation: P = 6 – Q and supply equation:
P = Q.
a. Calculate the price elasticity of demand at
equilibrium.
b. Calculate the equilibrium price and quantity, and consumer
surplus and producer surplus.
c. Suppose government imposes a unit tax of $1 on producers. Derive
the new supply curve and also calculate the new equilibrium price
and quantity.
d. Calculate tax revenue and the deadweight loss of this tax.

supposed market demand is given by the equation Q = 12
- P, where P is the price of the good in dollars. calculate
quantity demanded at every whole-dollar price from $0 to $ 10,
inclusive. calculate price elasticity of demand for every price
interval using the midpoint formula

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