Question

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 Producer Surplus, Consumer Surplus and Total surplus with a single price monopolist and a perfectly price discriminating monopolist.

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
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?
4) Monopoly The market demand curve for doodads takes the form QD = (80 – P)/7....
4) Monopoly The market demand curve for doodads takes the form QD = (80 – P)/7. a) Start a Table with doodad quantity ranging from 1 to 10, with the corresponding price in each case. Graph the demand curve. b) Calculate and add total revenue and marginal revenue, and add the marginal revenue curve to your graph. c) Is there any way that the monopolist can maximize profit by producing 7 doodads? Explain. d) Assume that there are no diminishing...
4) Monopoly The market demand curve for doodads takes the form QD = (80 – P)/7....
4) Monopoly The market demand curve for doodads takes the form QD = (80 – P)/7. a) Start a Table with doodad quantity ranging from 1 to 10, with the corresponding price in each case. Graph the demand curve. b) Calculate and add total revenue and marginal revenue, and add the marginal revenue curve to your graph. c) Is there any way that the monopolist can maximize profit by producing 7 doodads? Explain. d) Assume that there are no diminishing...
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve...
6. Calculate (a) the monopoly price, quantity, and profit for a firm facing a demand curve (1 pt) Q = 400 – 4P with constant MC = 40 Hint: Remember we use “inverse” demand curve where P(Q) to use the twice as steeply sloped rule. b) Now write out the 3 conditions necessary for a monopolist to be able to price discriminate. (1 pt) c) Consider a monopolist who can use 3rd degree price discrimination by separating the above demand...
A monopolist facing a market demand Q = 240 – 2p has the total cost function...
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 the demand curve is given by Qd=75-5P and the supply curve is given by Qs=P-3....
Suppose the demand curve is given by Qd=75-5P and the supply curve is given by Qs=P-3. SHOW YOUR WORK in the space below (type it out, line by line), and solve for the equilibrium price, the equilibrium quantity, the consumer surplus, the producer surplus, and the total surplus.
2. Suppose the demand function for a monopolist’s product is given by: Q = 80 –...
2. Suppose the demand function for a monopolist’s product is given by: Q = 80 – 5P (Total marks = 5) and the cost function is given by C = 30 + 2Q + 0.5Q2 A) What is the inverse demand function for this monopoly? B) Calculate the MC. C) Calculate the MR. D) Determine the profit-maximizing price. E) Determine the profit-maximizing quantity. F) How much profit will the monopolist make? G) What is the value of the consumer surplus...
1. A monopolist producer of a drug Zeta has demand P=270 – 0.2q and costs C=5000+50q+0.2q^2....
1. A monopolist producer of a drug Zeta has demand P=270 – 0.2q and costs C=5000+50q+0.2q^2. a. Derive the MC, ATC, and MR functions. b. Derive the profit-maximizing price, quantity, and profit. Show on a graph. c. What is the price and quantity if the monopolist loses patent protection and the industry becomes perfectly competitive? What is the size of the deadweight loss in monopoly? Show the deadweight loss triangle in the graph.
Imagine a firm called Bapple that is the monopoly in the market for smartwatches, with cost-functionC(Q)...
Imagine a firm called Bapple that is the monopoly in the market for smartwatches, with cost-functionC(Q) = 3Q2. Imagine the inverse demand function for smartwatches isp(Q) =400−2Q. 1.1 A. What are equilibrium price and equilibrium quantity? 1.2 B. Show the equilibrium price and equilibrium quantity graph-ically. Include the inverse demand curve, firm’s marginal rev-enue curve, and firm’s marginal cost curve. Now assume that Bapple is able to perfectly price discriminate in the market for smart-watches. 1.3 C. What three conditions...
1. Consider the following demand and supply functions for a good or service: Qd = 400...
1. Consider the following demand and supply functions for a good or service: Qd = 400 - 5P and Qs= 3P. a) Graph the supply and demand functions in the typical manner with price per unit (P) on the Y-axis and quantity on the X-axis. Make sure to clearly mark X-intercept and Y-intercept on the graph. b) What is the slope of each line? Show your calculations. c) What is the equilibrium price and quantity? Show your calculations. Show the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT