Question

2. The market for air conditioners has: Total Cost: TC = 20 + 10Q +(3/4)Q2 Marginal...

2. The market for air conditioners has: Total Cost: TC = 20 + 10Q +(3/4)Q2 Marginal Cost: MC = 10 + (3/2)Q Marginal Revenue: MR = 1,010 – 0.5Q Demand: Q = 4,040 – 4P

2a. If a monopoly controls the market, calculate the equilibrium price and quantity of air conditioners.

2b. Calculate the monopoly profits from part a.

2c. If the government imposed a tax of $80 per air conditioner that the monopoly sells, calculate the equilibrium new price and quantity of air conditioners and the government tax revenue.

2d. Calculate the monopoly profits from part c.

2e. Calculate the minimum tax that the government could charge to make the monopoly produce no output.

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
Consider a total cost function of TC = 0.5Q^2 +10Q + 20 and the market demand...
Consider a total cost function of TC = 0.5Q^2 +10Q + 20 and the market demand function Q=70-p. a What is the profit-maximizing output and price for the perfect competition? Calculate its profit. b What is the profit-maximizing output and price for the monopolist? Calculate its profit. c What is the profit-maximizing output and price for the monopolist in the second market? Calculate its profit.
2. The market for a good has an inverse demand curve of p = 40 –...
2. The market for a good has an inverse demand curve of p = 40 – Q and the costs of producing the good are defined by the following total cost function: TC = 100 + 1.5Q2. a. If this good is produced in a monopoly market, provide a graph of the demand curve, marginal revenue curve and marginal cost curve. Then calculate the equilibrium output and price . b. Calculate the price elasticity of demand at the equilibrium price...
2. The market for a good has an inverse demand curve of p = 40 –...
2. The market for a good has an inverse demand curve of p = 40 – Q and the costs of producing the good are defined by the following total cost function: TC = 100 + 1.5Q2. a. If this good is produced in a monopoly market, provide a graph of the demand curve, marginal revenue curve and marginal cost curve. Then calculate the equilibrium output and price . b. Calculate the price elasticity of demand at the equilibrium price...
2. The market for a good has an inverse demand curve of p = 40 –...
2. The market for a good has an inverse demand curve of p = 40 – Q and the costs of producing the good are defined by the following total cost function: TC = 100 + 1.5Q2. a. If this good is produced in a monopoly market, provide a graph of the demand curve, marginal revenue curve and marginal cost curve. Then calculate the equilibrium output and price. b. Calculate the price elasticity of demand at the equilibrium price and...
a. Each of the 10 firms in a competitive market has a cost function of C...
a. Each of the 10 firms in a competitive market has a cost function of C = 25 + q^2. The market demand function is Q = 120 - p. Determine the equilibrium price, quantity per firm, and market quantity. b. Given the information in part a, what effect does a specific tax of $2.40 per unit have on the equilibrium price and quantities? Suppose that market demand for a good is Q = 480 - 2p. The marginal cost...
(i) A monopolist has the following total cost function: C=50+10Q+0.5Q2 They face the market demand of:...
(i) A monopolist has the following total cost function: C=50+10Q+0.5Q2 They face the market demand of: P= 210-2Q a. What is the profit maximizing price and quantity set by this monopoly? What is the monopolist's profit? b. Calculate the producer surplus, consumer surplus, and deadweight loss. c. If the price elasticity of demand faced by this monopolist at the equilibrium is -1.625, what is the Lerner Index? d. If the price elasticity of demand faced by this monopolist at the...
3. (i) A monopolist faces the following demand and total cost functions: Q1 = 65 -1/2P,...
3. (i) A monopolist faces the following demand and total cost functions: Q1 = 65 -1/2P, TC = Q2 + 10Q + 50 (a) Calculate the profit maximizing output and price of the monopolist. Calculate the resulting profit. (12 points) (b) Suppose the government imposes an excise tax of $30 on the production and sale of the product. Calculate the resulting optimal profit maximizing output and price for the monopolist. Also determine the level of profit. (12 points) (c) If...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT