Question

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* = _________

Answer #1

The demand function faced by the monopolist is

Q= 205- 2P

The cost function is

C= 2Q

The marginal cost at which the profit of the monopolist would be maximized can be obtained by differentiating the cost funtion.

The profit maximizing marginal cost of the monopolist is

MC= 2

The profit of the monopolist is maximized where the marginal revenue = marginal cost.

The inverse demand function of the monopolist is

P= 102.5- Q/2

The total revenue of the monoplist

TR= PQ= 102.5Q -Q^{2}/2

The marginal revenue becomes

MR= 102.5 -Q

Equatig, MR= MC

102.5 -Q= 2

Q= 100.5

The profit maximizing quantity of the monopolist is 100.5

The corresponding price can be obtained by the inverse demand fucntion

P= 102.5- 100.5/2= 52.25.

A monopolist faces a demand function defined as Q = 40 – 2P. The
monopolist's marginal cost is equal to $15 at all levels of output.
What price should the firm charge in order to maximize profits?

A monopolist faces the inverse demand function p = 300 – Q.
Their cost function is c (Q) = 25 + 50Q. Calculate the profit
maximizing price output combination

1. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC = 2Q + 10. The firm's profit
maximizing output is
2. Suppose a monopolist faces the demand for its good or service
equal to Q = 130 - P. The firm's total cost TC = Q2 +
10Q + 100 and its marginal cost MC...

A monopolist faces the following demand curve, marginal
revenue curve, total cost curve and marginal cost curve for its
product: Q = 200 - 2P
MR = 100 - Q
TC = 5Q MC = 5
a. What is the profit maximizing level of output?
b. What is the profit maximizing price? c. How much profit
does the monopolist earn?

Consider a monopolist facing the following demand curve: Q = 390
– 0.5P. Further the monopolist faces MCM= ACM = 30.
a. Solve the profit-maximizing level of monopoly output, price
and profits.
b. Suppose a potential entrant is considering entering, but the
monopolist has a cost advantage. Thepotential entrant faces costs
MCPE = ACPE = 40. Assuming the monopolist continues to
profit-maximize,solve the residual demand curve for the potential
entrant
c. Assume the potential entrant follows the Cournot assumption
about...

A monopolist has a cost function given by C(Q)=Q2 and
faces the demand curve p=120-q
a. what is the profit maximizing monopolist output and price
b. what is the consumer surplus ? Monopoly profit?
c. now suppose the monopolist has to follow the narginal cost
pricing policy in other word she has to charge competitive prices
what is her output and price?

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?

Consider a monopolist. If the demand it faces is Q=pɛ, what is
the elasticity of demand? If marginal cost is $1 and the price
elasticity of demand is -2, what is the profit-maximizing
price?

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.

Acme is a monopolist who faces inverse market demand function P
(Q, y) = 100 - 2Q + y, where y is the quality level of Acme’s
product. Acme has cost function function C(Q) = 20Q.
1. For now, let Acme’s quality level be predetermined at y =
80.
(1a) Determine Acme’s optimal output level and profits.
(1b) Determine aggregate surplus.
(1c) Determine Acme’s output level such that aggregate surplus is
maximized.What are Acme’s profits in this case?
2....

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 7 minutes ago

asked 14 minutes ago

asked 20 minutes ago

asked 32 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago