Question

. A town has a monopoly supplier of potable water. The monopolist faces the following demand, marginal revenue, and marginal cost curves:

Demand: P = 70 – Q

Marginal Revenue: MR = 70 – 2Q

Marginal Cost: MC = 10 + Q

Graph these curves.

Assuming that the firm maximizes profit, what quantity does it produce? What price does it charge? Show these results on your graph.

The local government decides to impose a price ceiling that is 10 percent below the monopoly price derived in part (ii). What quantity would be demanded at this new price? Would the profit maximizing monopolist produce that amount?

Answer #1

A monopolist faces a demand curve P= 24 – 2Q, where P is
measured in dollars per unit and Q in thousands of units and MR=24
– 4Q. The monopolist has a constant average cost of $4 per unit and
Marginal cost of $4 per unit. a. Draw the average and marginal
revenue curves and the average and marginal cost curves on a graph.
b. What are the monopolist’s profits-maximizing price and quantity?
c. What is the resulting profit? Calculate...

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...

Consider a pure monopolist who faces demand Q= 205 - 2P and has
a cost function C(Q) = 2Q.
Solve for the information below, assuming that the monopolist is
maximizing profits.
The monopolist is able to produce at a constant marginal cost of
_________
The monopolist's profit-maximizing level of output is Q* =
______
The monopolist's profit-maximizing price is P* = _________

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?

A patent monopolist faces a demand curve: P=10-1/3 Q and total
cost F+2Q+2/3 Q^2, where F is non-negative.
i. What is the monopolist’s short-run profit-maximizing output
and price? What is his short-run profit per period?
ii. In addition to solving for the profit-maximizing output and
price, draw a graph showing the inear demand curve, the marginal
revenue and marginal cost curves that demonstrate the situation
described above

A monopolist facing a market demand Q = 240 – 2p has the total
cost function TC(q) = q2. Draw carefully the relevant
graph with MC, MR, D curves and identify all relevant points,
intersections, intercepts.
(a) What is the monopolist’s profit maximizing quantity and
price?
(b) If the market is reorganized as perfectly competitive, what
should be the market price and quantity?
(c) Calculate the DWL associated with the monopoly in (a).
Now the government notices that the monopolist...

Suppose a monopolist faces the following demand curve: P = 750 –
Q.If the long run marginal cost of production is constant and equal
to $30.
a) What is the monopolist’s profit maximizing level of
output?
b) What price will the profit maximizing monopolist charge?
c) How much profit will the monopolist make if she maximizes her
profit?
d) What would be the value of consumer surplus if the market
were perfectly
competitive?
e) What is the value of the...

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) Assume the firm operates in the monopoly market in the long
run with the demand function P = 100-Q and TC = 640 + 20Q with TC
showing the total cost of production, Q and P respectively of
output quantity and price. Using the information above,
publish
i) Total revenue function (TR)
ii) Marginal revenue (MR)
iii) Marginal cost function (MC)
iv) Determine the level of price and quantity of production that
maximizes profit
v) Determine the amount of...

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...

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