Question

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 is actually composed of two production plants, the first plant has a total cost function TC1(q) = 2q2 + 16q
(d) Derive the marginal cost of the second plant, MC2(q).
(e) At the profit maximizing point for the monopoly in (a), how many units are produced in each plant?

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
Consider a monopolist facing a market demand given by:                                  
Consider a monopolist facing a market demand given by:                                        P = 100 – 2Q Where P is the price and Q is quantity. The monopolist produces the good according to the cost function c(Q) = Q2 + 10. Determine the profit-maximizing quantity and price the monopolist will offer in the market Calculate the profits for the monopolist Calculate the deadweight loss due to a monopoly. Illustrate this in a well labeled diagram.
Suppose the market demand function is given by Q = 200 - 2p. The monopolist has...
Suppose the market demand function is given by Q = 200 - 2p. The monopolist has the following cost function TC = 100 + 0.5Q2 (MC = 0.5 + Q) (a) find profit maximizing p and Q for the monopolist (b) suppose regulation was implemented and the regulator "coerced" the monopolist to behave as "a competitive firm would(e.g., p=MC)". Find this p and Q. (c) calculate the size of the (dead weight) welfare loss triangle; (d) how much of this...
Consider a pure monopolist who faces demand Q= 205 - 2P and has a cost function...
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* = _________
Consider a monopolist facing a market demand given by P = 100 - 2Q where P...
Consider a monopolist facing a market demand given by P = 100 - 2Q where P Is the price and Q is the quantity. The monopolist produces the good according to the cost function c(Q)=Q2+10 (a) Determine the profit maximizing quantity and price the monopolist will offer in the market (b) Calculate the profits for the monopolist. (c) Calculate the deadweight loss due to a monopoly. Illustrate this In a well labelled diagram.
Consider a monopolist facing a market demand given by p=100-2q Where p is the price and...
Consider a monopolist facing a market demand given by p=100-2q Where p is the price and q is the quantity, the monopolist produces good according to the cost function c(q)=q^2 +10 A determine the profit-maximizing quantity and the price the monopolist will offer in the market B calculate the profits for the monopolist C calculate the deadweight loss due to a monopoly. Illustrate this in a well-labelled diagram.
Consider a monopolist who produces good X using a total cost function 20 + 12X. The...
Consider a monopolist who produces good X using a total cost function 20 + 12X. The demand for good X is X = 500 – 2P, where P is the market price. a. Find the profit maximizing output level for the firm, as well as the price. b. Find the DWL at the monopolist’s profit maximizing output.
A monopolist is facing the demand function p =440−q and has the cost function c(q)=2q2. a)...
A monopolist is facing the demand function p =440−q and has the cost function c(q)=2q2. a) Find producer’s surplus and consumers’ surplus if the monopolist is charging a uniform price. b) Prove that the uniform monopoly outcome is not Pareto efficient. c) Provide an example of monopoly regulation that will improve efficiency. d) Find the optimal entry fee and usage fee if the firm is charging a two-part tariff. What are the monopoly profits? e) Find producer’s surplus and consumers’...
The market demand curve is P = 90 − 2Q, and each firm’s total cost function...
The market demand curve is P = 90 − 2Q, and each firm’s total cost function is C = 100 + 2q2. Suppose there is only one firm in the market. Find the market price, quantity, and the firm’s profit. Show the equilibrium on a diagram, depicting the demand function D (with the vertical and horizontal intercepts), the marginal revenue function MR, and the marginal cost function MC. On the same diagram, mark the optimal price P, the quantity Q,...
Suppose the demand model and the cost function facing a firm is expressed as P= 120-5Q...
Suppose the demand model and the cost function facing a firm is expressed as P= 120-5Q and TC= 20+ 30Q + 2Q2 1. Calculate i.                 the profit maximizing equilibrium level of output that the monopolist will produce ii.               the price that the monopolist would charge iii.             and the profit of the monopolist
Let the demand function of natural monopolist be Q = 50 - 5P and the cost...
Let the demand function of natural monopolist be Q = 50 - 5P and the cost function be TC = 10 + 2Q. Here TC represents total cost, P represents price and Q is quantity. What is the average cost and total profit of the natural monopolist in the selected energy market?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT