Question

Suppose a monopoly sells to two identifiably different types of customers, A and B. The inverse demand curve for group A is PA = 20 - QA, and the inverse demand curve for group B is PB = 20 - 2QB. The monopolist is able to produce the good for either type of customer at a constant marginal cost of 4, and the monopolist has no fixed costs. If the monopolist is unable to price discriminate (no reselling), (1) what are the profit maximizing price and quantity, and (2) what are the consumer surplus, profit, and deadweight loss?

Answer #1

Suppose a monopoly sells to two identifiably different types of
customers, A and B. The inverse demand curve for group A is PA=
20-QA, and the inverse demand curve for group B is PB= 20-2QB. The
monopolist is able to produce the good for either type of customer
at a constant marginal cost of 4, and the monopolist has no fixed
costs. If the monopolist is unableto price discriminate (no
reselling), (1) what arethe profit maximizing price and quantity,
and...

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?

2、Suppose a monopoly is facing two different types of consumers
with inverse demand functions ?=200−?1 and ?=150−2?2. Monopoly
cannot observe who belongs to which group. Monopoly’s marginal cost
is zero and there is no fixed cost.（20 points）
(1) Suppose the monopoly offers two options specifying quantity
and total price. The first offer is targeted at consumer 1 with
?1=200 such that it makes consumer 1 indifferent between the two
offers. The second offer is targeted at consumer 2 with ?2=75...

6. Curse Purge Plus is a monopolist in the curse removal market
They face an inverse demand curve given by P=200-4Q, where Q is the
number of curse removals they sell. Their cost function is
C(Q)=10+8Q.
a. Write down the company’s profit function
b. Find the first-order condition for profit maximization.
c. Find the profit-maximizing price and quantity, and the
maximum profit.
d. Calculate the consumer surplus in the market at the monopoly
price and quantity.
e. If price were...

A
monopoly has an inverse demand curve given by: p=28-Q
And a constant marginal cost of $4. Calculate deadweight loss
if the monopoly charges the profit-maximizing price.
Round the number to two decimal places.

PROBLEM: FIRM WITH TWO PLANTS, A and B The firm’s Inverse Demand
is P=50-Q , where Q=QA+QB The AVC at Plant A is AVCA =20+QA The AVC
at Plant B is AVCB=10+2QB
Find the Profit maximizing value of Q
Find the Profit maximizing allocation of Q to Plants A and B
Find the Price associated with the Profit-maximizing value of
Q

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).

Suppose the inverse demand for a product produced by a single
firm is given by P = 200 ? 5Q and that for this firm MC = 20 +
2Q.
a) ) If the firm cannot price-discriminate, what are the
profit-maximizing price and level of output?
b) If the firm cannot price-discriminate, what are the levels of
producer and consumer surplus in the market? What is the deadweight
loss? Both compute and illustrate each on a graph.
c) If the...

A firm produces two different goods, with demand given by the
following: Pa = 200 – 25Qa – 2Qb and Pb = 75 – 2Qb Where Pa = price
of good A, Pb = price of good B, Qa = quantity of good A and Qb =
quantity of good B.
The marginal costs for the two goods are 12 for good A and 20
for good B.
Determine optimal prices and quantities for each good.

If the inverse demand curve is P = 120 – 20Q and the marginal
cost is constant at $20, how does charging the monopoly a specific
tax of $10 per unit affect: a. the monopoly’s profit maximizing
level of output, price, and profit, and b. consumer surplus
producer surplus and total welfare (where society’s welfare
includes the tax revenue?

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