Question

Problem VII: The average total cost of a monopolistic rm is ATC = 80/Q +20Q. The...

Problem VII: The average total cost of a monopolistic rm is ATC = 80/Q +20Q. The firm is facing the demand function given by P = 6000 - 20Q.

a) What will be the total profit that this rm will generate if it chooses price and quantity optimally? (Prot=224920)

b) What would be the profit of this rm if it behaved competitively? (Prot=199920)

c) What would be the long run equilibrium price if this market was competitive? (80)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Q) Perfect Competition Demand: P=$4 Marginal revenue: MR = $4 Average total cost: ATC = 2/Q...
Q) Perfect Competition Demand: P=$4 Marginal revenue: MR = $4 Average total cost: ATC = 2/Q + Q Marginal cost :MC = 2Q Draw a graph showing MC. MR, demand, and ATC. Illustrate this firm's revenue, cost, and profit in your graph. Then, Explain why the demand is perfectly elastic in a perfectly competitive marker.
14. A monopolistic competition firm a. chooses Q based on MR=MC rule b. has an ATC...
14. A monopolistic competition firm a. chooses Q based on MR=MC rule b. has an ATC that is a straight line upward sloping graph c. makes positive economic profit in the long run d. has no idle capacity 13. A market may look like: a. an oligopoly set up made of one firm b. monopolistic competition made of one firm c. monopoly made of one firm d. perfect competition made up of one firm 12. In the case of duopoly...
the demand function P=1600-4q is for trucks (p=price q=quantity) Average cost= (300/q)+20 is my TC=300+20q since...
the demand function P=1600-4q is for trucks (p=price q=quantity) Average cost= (300/q)+20 is my TC=300+20q since TC=AC*Q Q- How many trucks must be produced and sold to maximise total profit ?
Consider the following total cost function for an individual firm: C(q) = 10+ q + (1/4)q^2...
Consider the following total cost function for an individual firm: C(q) = 10+ q + (1/4)q^2 The industry demand is estimated to be: Q = 100 - P 1) Now suppose there is a monopolist facing the industry demand. Write down the monopolist's pro t function. 2) What is the equation of the monopolists marginal revenue function? Also, explain how the monopolist's marginal revenue function differs from the marginal revenue function of a firm in a long-run perfectly competitive market....
Assume a firm's total cost curve can be represented as follows:                TC= 20q+ q^2 Assume...
Assume a firm's total cost curve can be represented as follows:                TC= 20q+ q^2 Assume the market price for this good is $100 per unit. A. At what output level is this firm earning 0 economic profits? B. At this level of ouput, what is ATC?    What is AVC?      What is AFC? C. At what output level is ATC at its minimum?
You are a producer in a constant-cost perfectly competitive industry. Your long-run total, marginal, and average...
You are a producer in a constant-cost perfectly competitive industry. Your long-run total, marginal, and average costs are given by TC = 2Q² + 128, MC = 4Q, and ATC = 2Q+ (128/Q). What is the long-run equilibrium price?
Consider a natural monopoly with the following total cost function: TC= 1000 + 20Q and the...
Consider a natural monopoly with the following total cost function: TC= 1000 + 20Q and the demand given by P = 140 - 2Q. If you would like to eliminate the deadweight loss completely, what pricing would you suggest that the government imposes on this monopoly. P=MC=20Q and a subsidy to make sure that the monopoly can cover the fixed cost P=AC=20 and a tax to move the quantity traded to the efficient level None of the other answers is...
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...
Guthrie Medical has a total cost function TC(q) = 100 + 50q + 10q^2, so that...
Guthrie Medical has a total cost function TC(q) = 100 + 50q + 10q^2, so that the marginal cost is MC(q) = 50 +20q. The price of medical care is currently P=90. What is the quantity that Guthrie Medical will choose to produce? At that quantity, what is the average total and average variable cost for Guthrie? (Hint: ATC(q) = TC(q)/q) Can Guthrie operate in that market in the long term? What about the short term? Guthrie would like to...
The graph illustrates an average total cost (ATC) curve (also sometimes called average cost), marginal cost...
The graph illustrates an average total cost (ATC) curve (also sometimes called average cost), marginal cost (MC) curve, average variable cost (AVC) curve, and marginal revenue (MR) curve (which is also the market price) for a perfectly competitive firm that produces toy spaceships. Please answer the three questions, assuming that the firm is profit maximizing and does not shutdown in the short run. What is the firm's total revenue? $ What is the firm's total cost? $ What is the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT