Question

Assume the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16.

Find the monopoly’s profit maximization output.

Find the monopoly’s profit maximization price.

Find the monopoly’s maximum profit.

Find the monopoly’s deadweight loss.

Please show work for parts c and d

Answer #1

To find the profit maximizing quantity and price we first need the MR curve for the monopolist

MR=100-4Q

A Monopolist sets its MR=MC for profit maximization quantity

So, 100-4Q=16 to solve for Q

or Q = 21

The profit maximization price

= P=100-2Q = 100-42=$58

Since Profit= Total Revenue-Total cost

So, TR = PxQ = 58x21=$1218

and TC = $16 per unit x 21 units = $336

Therefore, Profits = $1218-$336 = $882

The deadweight loss = (1/2)($58 per unit - $10 per unit)(84 units-21 units)

=$1512

If the inverse demand curve a monopoly faces is p = 170 - 2Q,
and MC is constant at 10, then profit maximization is achieved when
the monopoly sets price equal to
A. 58.
C. 40.
B. 21.
D. 16.

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 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).

Monopoly
Consider a situation where a monopolist faces the following
inverse market demand curve
p = 132 − 2q
and the following cost function
T C = 12q + 2q 2
f) How much deadweight loss does the monopolist create?
g) What could the government do to regulate the monopolist?

a) A monopoly faces a demand curve given by P = 2,500 - 0.5Q and
has marginal cost constant at $200. What is the profit-maximizing
output level?
b) A monopoly faces a demand curve given by P = 2,500 - 0.5Q and
has marginal cost constant at $100. What is the profit-maximizing
price?

Consider a two-firm oligopoly facing a market inverse demand
curve of P = 100 – 2Q, where Q is the sum of q1 and q2. q1 is the
output of Firm 1 and q2 is the output of Firm 2. Firm 1's marginal
cost is constant at $12, while Firm 2's marginal cost is constant
at $20. Answer the following questions, assuming that the firms are
Cournot competitors.
a. How much output does each firm produce? (answer is q1 =...

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.

1. Consider a basic monopoly model where: The Inverse demand
p=P(q) & Cost function is c(y).There is a single uniform price
to all consumers.Use algebraic expressions to answer all of the
following for question 1.
a. What is the monopoly’s problem?
b. Given the cost function and the inverse demand equations set
up the first order condition. Solve the first order condition and
outline the monopoly’s pricing rule?
c.The total change in revenue that follows an increase in output
is...

a) A monopoly faces a demand curve given by P = 2,500 - 0.5Q and
has marginal cost constant at $900. What is the profit-maximizing
output level?
b) A monopoly faces a demand curve given by P = 2,500 - 0.5Q and
has marginal cost constant at $1,000. What is the profit-maximizing
price?

Suppose a monopoly faces an inverse demand curve of P = 50 - 3Q
and has a marginal cost function of 4Q (assume no fixed costs). If
the government is considering legislation that would regulate price
to the competitive level, what is the maximum amount the monopoly
would spend on (legal) lobbying activities designed to thwart the
regulation?

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