Question

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)=Q^{2}+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.

Answer #1

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 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.

A monopoly is facing inverse demand given by P = 40−0.5Q and
marginal cost given by MC = 7+0.1Q. Illustrate these on the graph
and answer the questions below.
(a) If the monopolist is unable to price discriminate, what is
the profit-maximizing quantity? What is the price? What is consumer
surplus? Producer surplus? Deadweight loss?
(b) Suppose instead the monopolist is able to perfectly price
discriminate. How many units will be sold? What is consumer
surplus? Producer surplus? Deadweight loss?

1. Consider a market with inverse demand P (Q) = 100 Q. A
monopolist with linear cost C(Q) = 20Q serves this market.
(a) Find the monopolistís optimal price and quantity.
(b) Find the price, quantity, proÖt, consumer surplus, and
social welfare under perfect competition.
(c) Find the optimal proÖt, consumer surplus, social welfare
and the deadweight loss for monopoly.
(d) What is the % loss in social welfare as we move from perfect
competition to monopoly.

A monopolist faces a demand curve P= 24 – 2Q, where P is
measured in dollars per unit and Q in thousands of units and MR=24
– 4Q. The monopolist has a constant average cost of $4 per unit and
Marginal cost of $4 per unit. a. Draw the average and marginal
revenue curves and the average and marginal cost curves on a graph.
b. What are the monopolist’s profits-maximizing price and quantity?
c. What is the resulting profit? Calculate...

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...

A monopolist faces inverse demand p = 40 − 2q and has a marginal
cost of 20.
(a) [20 points] What output will the monopolist produce?
(b) [10 points] What are consumer surplus, monopoly profits, and
deadweight loss?
(c) [10 points] Suppose the monopolist’s costs rise to 90. What
are consumer surplus, monopoly profits, and deadweight loss
now?
Please help to explain part (c).

1. Consider a monopolist where the market demand curve
for the produce is given by P = 520 - 2Q. This monopolist has
marginal costs that can be expressed as MC = 100 + 2Q and total
costs that can be expressed as TC = 100Q + Q2 + 50. (Does not need
to be done. Only here for reference)
2. Suppose this monopolist from Problem #1 is regulated
(i.e. forced to behave like a perfect competition firm) and the...

Monopoly
Consider a situation where a monopolist faces the following
inverse market demand curve
p = 132 − 2q
and the following cost function
T C = 12q + 2q 2
f) How much deadweight loss does the monopolist create?
g) What could the government do to regulate the monopolist?

Consider the market for good Q. The inverse demand function is
p(Q) = 24 – 2Q, where p denotes the price of good Q. The production
costs of the representative firm are C(Q) = 4Q. In addition,
production causes environmental damage of D(Q) = 12Q.
a) Determine the socially optimal output level Q*. Discuss the
optimality condition and illustrate your solution in a
diagram.
b) Assume that there is no government intervention. Calculate the
market equilibrium in the case of...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 4 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 18 minutes ago

asked 24 minutes ago

asked 25 minutes ago

asked 28 minutes ago

asked 28 minutes ago

asked 28 minutes ago

asked 32 minutes ago

asked 35 minutes ago

asked 37 minutes ago