Question

4. A monopolist faces a linear demand for its product and has a flat marginal and...

4. A monopolist faces a linear demand for its product and has a flat marginal and average cost of production. An innovation lowers the cost of production by $1 per unit. Use the graph to show the profit-maximizing monopolist’s choice and the changes due to the innovations. a. How much will the price change as the result of the innovation? b. How much will profit per unit change as the result of the innovation? c. Summarize: who benefits from the innovation? Explain in 2-3 sentences.

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
Suppose a monopolist faces the following demand curve: P = 750 – Q.If the long run...
Suppose a monopolist faces the following demand curve: P = 750 – Q.If the long run marginal cost of production is constant and equal to $30. a) What is the monopolist’s profit maximizing level of output? b) What price will the profit maximizing monopolist charge? c) How much profit will the monopolist make if she maximizes her profit? d) What would be the value of consumer surplus if the market were perfectly competitive? e) What is the value of the...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
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?
A monopolist faces the demand for its product: p = a - bQ. The monopolist has...
A monopolist faces the demand for its product: p = a - bQ. The monopolist has a marginal cost given by c and a fixed cost given by F. Answer the following questions, while showing all of your derivation steps. Just providing final answer does not warrant any mark. 2-a) Assume that F is sufficiently small such that the monopolist produces a strictly positive level of output. What are the profit-maximizing price and quantity? 2-b) Compute the maximum profit for...
When a monopolist faces a downward sloping linear demand curve for its product, total revenue is...
When a monopolist faces a downward sloping linear demand curve for its product, total revenue is maximized when the monopolist produces on the midpoint of the demand curve (unit elastic point). Under what conditions, if ever, would a profit maximizing, single-price monopolist choose to produce at this point of the demand curve?
A monopolist faces a demand curve P= 24 – 2Q, where P is measured in dollars...
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 patent monopolist faces a demand curve: P=10-1/3 Q and total cost F+2Q+2/3 Q^2, where F...
A patent monopolist faces a demand curve: P=10-1/3 Q and total cost F+2Q+2/3 Q^2, where F is non-negative. i. What is the monopolist’s short-run profit-maximizing output and price? What is his short-run profit per period? ii. In addition to solving for the profit-maximizing output and price, draw a graph showing the inear demand curve, the marginal revenue and marginal cost curves that demonstrate the situation described above
1) Suppose that a single price monopolist faces a linear, downward sloping demand curve and a...
1) Suppose that a single price monopolist faces a linear, downward sloping demand curve and a total cost curve that includes the following data points: Price Quantity Total Revenue 8 0 7 1 6 2 5 3 4 4 3 5 2 6 1 7 0 8 Quantity Total Cost 0 2 1 4 2 6 3 8 4 10 5 12 6 14 7 16 8 18 a. What is the profit maximizing condition for a monopolist? In order...
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* = _________
. A town has a monopoly supplier of potable water. The monopolist faces the following demand,...
. A town has a monopoly supplier of potable water. The monopolist faces the following demand, marginal revenue, and marginal cost curves: Demand: P = 70 – Q Marginal Revenue: MR = 70 – 2Q Marginal Cost: MC = 10 + Q Graph these curves. Assuming that the firm maximizes profit, what quantity does it produce? What price does it charge? Show these results on your graph. The local government decides to impose a price ceiling that is 10 percent...
1. Suppose a monopolist faces the demand for its good or service equal to Q =...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT