Question

Company ARC is a monopolist in the robot cleaner industry. Its
total cost function is given by:

TC = 200 − 5Q + 2Q#

The demand in this robot cleaner industry is:

P = 115 − Q

(a) What output and price should ARC set to maximise
profit?

(b) How much profit does ARC generate based on the calculation
in (a)? What consumer surplus would be generated?

(c) What would output be if ARC acted like a perfect
competitor, what consumer surplus would then be generated?

(d) Why is there a social cost to monopoly power? Explain
briefly.

Answer #1

D) since in monopoly deadweight loss exist, which is the total fall in total Surplus , when compared to Perfect Competition.

So this is the social cost

A company is a monopolist in the door industry. The total cost
is C = 100 - 5Q + Q^2 and the inverse demand is P = 55 - 2Q.
x. Determine the price that the company should set in order to
maximize profit. At what output does the firm produce? Determine
how much profit and consumer surplus would the company
generate.
y. Determine the output if the company was a perfectly
competitive firm. What would the profit and consumer...

Dayna’s Doorstops, Inc. (DD) is a monopolist in the doorstop
industry. Its cost is C = 5 + 10Q + Q2, and the demand
function is Q = 260 – 2P. Assume that the monopolist is maximizing
its profits.
What price should DD set to maximize profit? What output does
the firm produce?
How much consumer surplus does DD generate?
How much producer surplus does DD generate?
What is the deadweight loss from monopoly power

A monopolist faces an inverse demand curve P(Q)= 115-4Q and
cost curve of C(Q)=Q2-5Q+100.
Calculate industry output, price, consumer surplus, industry
profits, and producer surplus if this firm operated as a
competitive firm and sets price equal to marginal cost.
Calculate the dead weight loss sue to monopoly.

McCullough has a monopoly on rental dwellings in the local
community. The demand function for rental dwellings is Q = 70,000 -
50P. McCullough's total cost of providing rental dwellings is TC =
0.005Q2 + 20Q
a. What price will this monopolist charge? What quantity will it
sell? How much profit does McCullough make? (8 points)
b. What would output be if DD acted like a perfect competitor
and set MC = P? What profit would then be generated? (6...

3. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given by:
QD= 100 -5P.
Calculate the price the monopolist will charge.
(Do not include a dollar sign in your response. Round to the
nearest two decimals.)
4. Suppose that a price-searcher monopolist had a total cost
function given by: TC= 20 + 2Q +0.25Q2.
The demand for the price searcher's product is given...

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...

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 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).

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?

Suppose a monopolist faces consumer demand given by
P=600−22Q
with a constant marginal cost of
$20
per unit (where marginal cost equals average total cost. assume
the firm has no fixed costs).
If the monopoly can only charge a single price, then it will
earn profits of
(Enter your response rounded as a whole number.)
Correspondingly, consumer surplus is
However, if the firm were to practice price discrimination such
that consumer surplus becomes profit, then, holding output
constant at...

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