Question

Milwaukee Utilities has a complete monopoly over the generation and transmission of energy. The following information...

Milwaukee Utilities has a complete monopoly over the generation and transmission of energy. The following information on this company is given as follows:

Demand = 1000 - Q

Marginal cost = 500

Where Q is measured in megawatts and prices and costs are measured in dollars.

How much energy would be sold and at what price if

A. The firm sets price as a monopoly?

B. What is the firm’s profits at the monopoly price determine in part a?

C. Now suppose the industry (firm) behaves perfectly competitively, how much energy would be sold and at what price?

D. What is the firm’s profits at the monopoly price and at the competitive price?

E. Now suppose the firm engages in perfect (3rd degree) price discrimination. What is the firm’s profit?

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
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...
Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2...
Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2 simultaneously and face the demand curve. P= 30 – Q, where Q = Q1 + Q2. Both firms have a marginal cost of $9. 1. Suppose that the two firms compete by simultaneously setting PRICES? What will the price be? How much will each firm produce? What will each firm’s profits be? 2. Now, continue with the price-setting assumption in (1), and assuming the...
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...
In a figure, illustrate the case of a monopoly that is incurring an economic loss. Label...
In a figure, illustrate the case of a monopoly that is incurring an economic loss. Label the price the monopoly charges as P and the quantity the monopoly produces as Q. A perfectly competitive industry becomes a single-price monopoly and the industry’s costs do not change. Are consumers better or worse off with this change? Is society better or worse off with the change? Support your answers by drawing one figure that compares the price and quantity produced when the...
12. [15 pts] A company has monopoly rights to sell the popular video “Boyfights”. Suppose there...
12. [15 pts] A company has monopoly rights to sell the popular video “Boyfights”. Suppose there are two groups of buyers of Boyfights. Demand for the respective groups is given by the following equations: Group I: P1 = 10 – Q1 Group II: P2 = 8 – 2Q2 Where Q1 and Q2 are the number of Boyfights movies sold to each group. The total cost function for making each copy of the movie is TC = Q, where Q =...
The goal of this problem is to compare perfect competitive outcome (scenario 1) with monopoly outcome...
The goal of this problem is to compare perfect competitive outcome (scenario 1) with monopoly outcome (scenario 2). In both two scenarios, market demand is given by Q=1200-50P. Scenario 1: Consider a perfectly competitive market with 150 identical firms. Each firm’s marginal costs are given by MC=q+4. (4pts) Determine the equation for market supply curve. Find the equilibrium price and industry output. 1. Determine the equation for market supply curve. Find the equilibrium price and industry output. 2. Plot the...
Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio...
Robert treats coffee and creamer as perfect complements and has very specific requirements for the ratio of creamer to coffee. He will drink coffee only if he has exactly 3.00 packets of creamer for every cup of coffee. Coffee is priced at $3.00 per cup and creamer at $0.25 per packet. a. Suppose that Robert has $45.00 to spend on coffee and creamer. Find his optimal consumption bundle of coffee cups and creamer packets. b. Now, suppose that the price...
A monopoly firm faces a demand curve given by the following equation: P = $500 −...
A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. Excel please!!!...
The following equations describe the monopolist’s demand, marginal revenue, total cost and marginal cost: Demand: Qd...
The following equations describe the monopolist’s demand, marginal revenue, total cost and marginal cost: Demand: Qd = 12 – 0.25P | Marginal Revenue: MR = 48 – 8Q | Total Cost: TC = 2Q^2 | Marginal Cost: MC = 4Q Where Q is quantity and P is the price measured in dollars. a) What is the profit maximizing monopoly’s quantity and price? b) At that point, calculate the price elasticity of demand. What does the value imply? c) Does this...
Suppose that 2 firms are competing against each other in Cournot (output) competition and that the...
Suppose that 2 firms are competing against each other in Cournot (output) competition and that the market demand curve is given by P = 60 – Q or Q = 60 – P. In addition, assume the marginal cost for each firm is equal to 0 as we did in class. a. Solve for firm 1’s total revenue. Note that this should not require any calculus. b. If you take the derivative of firm 1’s total revenue, you should find...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT