Question

Suppose a monopolist faces market demand (Dm) of P(q) = a - bq and whose cost is C(q) = cq where c is a positive constant.

a. What the marginal revenue of the monopolist?

b. What is the monopoly price?

c. What is the monopolist's output at the price found in part
(b)?

d. What would be the market clearing price and quantity under
perfect competition

Answer #1

Ans.

1Suppose the firm is a monopolist. It faces a downward-sloping
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2-a) Assume that F is sufficiently small such that the
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A monopolist faces the inverse demand for its output:
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The monopolist faces a cost curve: C(Q) = 5Q. The government is
seeking ways to collect
tax revenue from the monopolist by imposing an ad valorem tax of
20% on the
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a. What price and quantity does the monopolist choose (post-tax)
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monopolist earn any
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seeking ways to collect
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