Question

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

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.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

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

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
A company is a monopolist in the door industry. The total cost is C = 100...
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 =...
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...
​​​​​ 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...
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 +...
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...
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....
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...
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...
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...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT