7. A monopolist in the market for widgets is facing a demand curve P= 60 -...
Name: Consider the market for a good where the demand curve facing a firm who has considerable market power is given by P = 80 -0.05Q, the marginal revenue curve is given by MR = 80 -0.1Q, and the firm's marginal cost curve is given by MC = 17 + 0.020. a. If the firm behaves like a competitive firm, find equilibrium price and quantity. Graphically identify and calculate consumer and producer surplus. b. If the firm behaves like a...
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
1. The demand and supply functions for widgets are as follows: Qd =60-0.5P Qs =0.5P-20 a. Solve for the competitive equilibrium price and quantity of widgets in this market. Illustrate this equilibrium in a graph. On your graph, show the regions that represent consumer surplus and producer surplus. Calculate the value of consumer surplus, producer surplus, and overall welfare. b. Suppose the government enacts a law stating that only 10 widgets can be produced and sold in the market. At...
A monopolist faces a market demand curve given by Q=70-P a. If the monopolist can produce at constant average and marginal costs ofAC-MC-6, what output level will the monopolist choose to maximize profits? What is the price at this output level? What are the monopolist's profits? b. Assume instead that the monopolist has a cost structure where total costs are described by C(Q) = 0.25Q2 - 5Q + 300. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now...
Consider a single-price monopolist (i.e. the monopolist cannot price discriminate) facing the following market demand curve: P = 120 − Q. The monopolist has constant marginal cost of $20 and zero fixed cost. (a) Determine the monopolist’s profit maximizing quantity, denoted QM, and profit maximizing price, denoted PM. (b) Determine the quantity and price that would result in the market if this instead were a competitive market, denoted QC and PC, respectively. (c) Draw a picture of the market demand...
3. Consider a uniform-price monopolist that faces demand curve P() 14 2Q and faces a total cost TC() 20 (a) Calculate the profit maximizing price and quantity erw erwyat er Patt Q= (b) Determine the consumer surplus, producer surplus, and deadweight loss erwyat erwy erwyatt CS = el DWL =
3. Monopoly Consider a situation where a monopolist faces the following inverse market demand curve 132 - 2a p and the following cost function TС — 12g + 2q* a) Derive the marginal revenue and marginal cost functions b) What are the equilibrium price and quantity if this market behaved as if it were competitive? c) Calculate the Consumer Surplus, Producer Surplus and Welfare levels under perfect petition d) What are the equilibrium price and quantity when the monopolist produces...
How do I solve this problem? 4. Benson's Park is a monopolist in the local camping market in the town of West Anderson. They face an inverse demand curve given by P-400-8Q, where Q is the number of tickets they sell. The park's cost function is C(Q)-100+160 Write down Benson's profit function (2 point) Find the first-order condition for profit maximization. (2 points) Find the profit-maximizing price and quantity, and the maximum profit. (3 points) a. b. c. d. Calculate...
1. Let the market demand curve be P=1000 - 10Q. Assume the market is controlled by a monopolist. Let fixed cost be $10,000 and Marginal Costs (MC)=20Q. a) What is the profit maximizing output? b) What is the monopolist's total revenue at the profit maximizing output? c) How much profit is the monopolist earning? d) Assume the government breaks up the monopolist in order to create a perfectly competitive market of identical firms. Assume the MC curve is now the...
A natural monopolist faces the following demand curve: P = 409 - 2Q, its total cost is given by: TC = 12800 + 9Q (marginal cost is the slope of total cost). (a) If the government regulates the monopolist to charge a socially optimal price, what price will it charge and how many units will it sell? How much are the profit, consumer surplus and producer surplus? (b) If it is not a regulated monopolist, what is its profit maximizing...