Question

A monopoly is facing inverse demand given by P = 40−0.5Q and marginal cost given by...

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?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
We are considering a monopoly facing the demand QD = 400−5P ⇔ P = 80−0.2QD. Its...
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...
Suppose the inverse demand for a product produced by a single firm is given by P...
Suppose the inverse demand for a product produced by a single firm is given by P = 200 ? 5Q and that for this firm MC = 20 + 2Q. a) ) If the firm cannot price-discriminate, what are the profit-maximizing price and level of output? b) If the firm cannot price-discriminate, what are the levels of producer and consumer surplus in the market? What is the deadweight loss? Both compute and illustrate each on a graph. c) If the...
Suppose a monopoly sells to two identifiably different types of customers, A and B. The inverse...
Suppose a monopoly sells to two identifiably different types of customers, A and B. The inverse demand curve for group A is PA = 20 - QA, and the inverse demand curve for group B is PB = 20 - 2QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 4, and the monopolist has no fixed costs. If the monopolist is unable to price discriminate (no reselling), (1) what...
The inverse market demand curve facing a monopoly retailer of gold jewelry is described by P=3000-0.5Q....
The inverse market demand curve facing a monopoly retailer of gold jewelry is described by P=3000-0.5Q. The retailer buys jewelry at a wholesale price, r, set by the monopolist manufacturer. Marginal cost for the manufacturer is 500. The retailer has additional marginal costs=100. What is the profit-maximizing wholesale price for the manufacturer? What is the profit-maximizing retail price for the retailer? What is the profit-maximizing quantity? If the two firms merged, what would be the profit-maximizing retail price and quantity?
Inverse Demand Equation: P=160–4Qd Marginal Revenue = 160-8Qd Marginal Costs = $0 What is price and...
Inverse Demand Equation: P=160–4Qd Marginal Revenue = 160-8Qd Marginal Costs = $0 What is price and quantity under perfect competition? What price would a monopoly charge? How much will it produce? What is the deadweight loss due to monopoly? If the monopolist can practice perfect price discrimination what is consumer surplus? What is producer surplus?
A monopolist faces inverse demand p = 40 − 2q and has a marginal cost of...
A monopolist faces inverse demand p = 40 − 2q and has a marginal cost of 20. (a) [20 points] What output will the monopolist produce? (b) [10 points] What are consumer surplus, monopoly profits, and deadweight loss? (c) [10 points] Suppose the monopolist’s costs rise to 90. What are consumer surplus, monopoly profits, and deadweight loss now? Please help to explain part (c).
Suppose a monopoly sells to two identifiably different types of customers, A and B. The inverse...
Suppose a monopoly sells to two identifiably different types of customers, A and B. The inverse demand curve for group A is PA= 20-QA, and the inverse demand curve for group B is PB= 20-2QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 4, and the monopolist has no fixed costs. If the monopolist is unableto price discriminate (no reselling), (1) what arethe profit maximizing price and quantity, and...
Hawkins micro brewery has a monopoly on oatmeal stout in the local market. The inverse demand...
Hawkins micro brewery has a monopoly on oatmeal stout in the local market. The inverse demand is P = 50 - 0.5Q. The marginal revenue is MR = 50 - 1Q. MC = 5 + 0.5Q. Calculate Hawkins profit maximizing output. Calculate the producer surplus. Calculate the dead-weight loss. What is the optimal price ceiling? If Hawkins was able to practice perfect price discrimination what price would it charge? What is the new prucer surplus.
A monopoly has an inverse demand curve given by: p=28-Q And a constant marginal cost of...
A monopoly has an inverse demand curve given by: p=28-Q And a constant marginal cost of $4. Calculate deadweight loss if the monopoly charges the profit-maximizing price. Round the number to two decimal places.
he inverse demand function faced by a monopoly is given byP=103Q. The monopolyhas a total cost...
he inverse demand function faced by a monopoly is given byP=103Q. The monopolyhas a total cost functionTC=Q2+2Q and a marginal cost function MC=2Q+2. (a) What are the monopolist’s profit maximizing price and quantity? Show these and theassociated deadweight loss on a diagram. (b) Calculate what price and quantity would prevail if this were a perfectly competitive marketwith the marginal cost curve acting as the supply curve? Show this price on your diagramfor part (a). (c) If the government imposes a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT