Question

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 firm make a profit? If so, how much? Show your
work.

d) What is the quantity this monopoly produces if it conducts
perfect price discrimination?

Answer #1

Suppose that the monopolist’s demand is: P = 10 – Q, so that
marginal revenue is: MR = 10 – 2Q.
The marginal cost is: MC = 2, and total fixed cost = 0.
a. Determine the profit maximizing price and output.
b. Calculate the amount of economic profit or loss at the profit
maximizing output.
c. Calculate the price elasticity of demand at the profit
maximizing point and explain it.
use relevant diagram to answer the question

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?

2. Suppose the demand function for a monopolist’s product is
given by: Q = 80 – 5P (Total marks = 5) and the cost function is
given by C = 30 + 2Q + 0.5Q2 A) What is the inverse demand function
for this monopoly? B) Calculate the MC. C) Calculate the MR. D)
Determine the profit-maximizing price. E) Determine the
profit-maximizing quantity. F) How much profit will the monopolist
make? G) What is the value of the consumer surplus...

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,...

he inverse demand function faced by a monopoly is given
byP=103Q. The monopolyhas a total cost functionTC=Q2+2Q and a
marginal cost function MC=2Q+2.
(a) What are the monopolist’s profit maximizing price and
quantity? Show these and theassociated deadweight loss on a
diagram.
(b) Calculate what price and quantity would prevail if this were
a perfectly competitive marketwith the marginal cost curve acting
as the supply curve? Show this price on your diagramfor part
(a).
(c) If the government imposes a...

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.

Suppose an industry demand curve is P = 90 − 2Q and each firm’s
total cost function is C = 100 + 2q 2 .
(a) (6 points) If there is only one firm in the industry, find
the market price, quantity, and the firm’s level of profit.
(b) (6 points) Show the equilibrium on a diagram, depicting the
demand curve, and MR and MC curves. On the same diagram, mark the
market price and quantity, and illustrate the firm’s...

Suppose there is a perfectly competitive industry in Dubai,
where all the firms are identical. All the firms in the industry
sell their products at 20 AED. The market demand for this product
is given by the equation: (Total marks = 5)
Q = 25 – 0.25P
Furthermore, suppose that a
representative firm’s total cost is given by the equation:
TC = 50 +4Q +
2Q2
What is the inverse demand function for this market?
Calculate the MC function?
Calculate...

Complete the following cost and revenue schedule:
Price
Quantity Demanded
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Average Total Cost
20
0
8
18
1
14
16
2
22
14
3
32
12
4
44
10
5
58
8
6
74
6
7
92
4
8
112
2
9
147
a. Graph the demand, MR, and MC curves.
b. At what rate of output are profits maximized within this
range?
c. What are the values of MR and MC...

Consider a firm with the demand function P(Q)=(50-2Q), and the
total cost function TC(Q)=10,000+10Q. Find the profit maximizing
quantity. Calculate the profit maximizing price (or the market
price). Hint: MR(Q)=(50-4Q),

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