Question

A monopolist faces a demand curve given by P = 70 – 2Q where P is...

A monopolist faces a demand curve given by P = 70 – 2Q where P is the price of the good and Q is the quantity demanded.The marginal cost of production is constant and is equal to $6. There are no fixed costs of production.

A. What quantity should the monopolist produce in order to maximize profit?  

B. What price should the monopolist charge in order to maximize profit?  

C. How much profit will the monopolist make?  

D. What is the deadweight loss created by this monopoly? (Hint: compare the monopoly outcome with the perfectly competitive outcome).

E. Monopoly deadweight loss =  

F. If the market were perfectly competitive, what quantity would be produced?  

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 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...
Consider a monopolist facing a market demand given by P = 100 - 2Q where P...
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)=Q2+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.
Consider a monopolist facing a market demand given by p=100-2q Where p is the price and...
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.
assume that a monopolist faces a demand curve Q =200 - 10P, and marginal cost of...
assume that a monopolist faces a demand curve Q =200 - 10P, and marginal cost of $15. Compared with the perfectly competitive market's price, assuming the same demand function and costs hold true, what is the Monopolist's mark up? What is the deadweight loss from Monopoly pricing
1) The inverse demand curve a monopoly faces is p=110−2Q. The​ firm's cost curve is C(Q)=30+6Q....
1) The inverse demand curve a monopoly faces is p=110−2Q. The​ firm's cost curve is C(Q)=30+6Q. What is the​ profit-maximizing solution? 2) The inverse demand curve a monopoly faces is p=10Q-1/2 The​ firm's cost curve is C(Q)=5Q. What is the​ profit-maximizing solution? 3) Suppose that the inverse demand function for a​ monopolist's product is p = 7 - Q/20 Its cost function is C = 8 + 14Q - 4Q2 + 2Q3/3 Marginal revenue equals marginal cost when output equals...
Hattori Hanzo, a monopolist with MC(Q) = 2Q, faces a demand curve of Q = 240...
Hattori Hanzo, a monopolist with MC(Q) = 2Q, faces a demand curve of Q = 240 - P. By how many whole units will he restrict production relative to the competitive outcome? Would price discrimination reduce or increase this gap in production? For full credit, briefly explain your answer.
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).
Monopoly Consider a situation where a monopolist faces the following inverse market demand curve p =...
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?
. 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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT