Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Question

Question

Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal). For parts (a)-(c), she faces a single-price demand curve ?=5−?.

b.(ii) What is the monopolist’s profit?

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Hi! Welcome to Chegg!

2.

b.

We have production function:

Cost = wl + vk = l + k

Cost minimizing condition is:

MRTS = Input price ratio

gives: k = l

Using this in production function, we get:

Cost function can be calculated as:

Marginal cost is given as:

We have Demand:

p = 5 - q

Profit maximizing condition: MR = MC

5 - 2q = 1

gives: q = 2

Profit maximizing quantity = 2.

Profit is given as:

If you are satisfied with the answer, please provide a positive rating. Feel free to comment in case of queries.

Have a nice day ahead!

Add a comment

Answer 2

Similar Homework Help Questions

Suppose a monopolist’s costs are described by the function C(Q) = 7 + Q2 and the...

Suppose a monopolist’s costs are described by the function C(Q) = 7 + Q2 and the monopolist faces a demand curve of Q = 30 − 2P. (a) What are the monopolist’s profit-maximizing price and quantity? What is the resulting profit? (b) If the monopolist could enforce first degree price discrimination, what would be the lowest price that it would charge and how many units it would produce? What would be the profit and consumer surplus? (c) How much consumer...
consider a monopolist who has a cost function of c(q) = 1/4 Q2 this monopolist faces...

consider a monopolist who has a cost function of c(q) = 1/4 Q2 this monopolist faces a demand given by Q(p) = 90 -2P. Solve for the profit maximizing price and quantity produced. Calculate their resulting profits. Show this profit maximizing also graphically. label the price and quantity on their curve. please show all steps.
Suppose a monopolist faces the following demand curve: P = 440 – 7Q. The long run marginal cost of production is constant and equal to $20, and there are no fixed costs. A) What is the monopolist’s...

Suppose a monopolist faces the following demand curve: P = 440 – 7Q. The long run marginal cost of production is constant and equal to $20, and there are no fixed costs. A) What is the monopolist’s profit maximizing level of output? B) What price will the profit maximizing monopolist produce? 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)...

A monopolist sells in two markets. The demand curve for her product is given by p1...

A monopolist sells in two markets. The demand curve for her product is given by p1 = 120 y1 in the first market; and p2 = 105 y2 2 in the second market, where yi is the quantity sold in market i and pi is the price charged in market i. She has a constant marginal cost of production, c = 10, and no fixed costs. She can charge different prices in the two markets. 1) Suppose the monopolist charges...
2. A monopolist serves a market with an aggregate demand function given by Q = 36...

2. A monopolist serves a market with an aggregate demand function given by Q = 36 – 3P. The monopolist’s cost function is given by C(Q) = 2Q. a. How much profit can the monopolist generate with first-degree price discrimination if resale can be prevented? What is the associated deadweight loss relative to the competitive level of output? b. Suppose that the monopolist can partition its market into two separate submarkets. The demand function for submarket 1 is given by...
A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and...

A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and Midwest). Demands for the two markets are: Q1 = 15 - P1 Q2 = 12.5 – 0.5 P2 The monopolist’s total cost is C = 5 + 3(Q1 + Q2 ). What are the prices, outputs, profits in each market if the monopolist can price discriminate? Check that the profit maximizing price and its elasticity of demand have the following relation between markets: P1...

Part E-H Assume a profit-maximizing monopolist faces a market demand given by P = (12,000 –...

Part E-H Assume a profit-maximizing monopolist faces a market demand given by P = (12,000 – 90Q)/100 and long run total and marginal cost given by LRTC = 5Q + Q2 + 40 (Note: The answer to this question must be hand-written.): a) Find the equation of the marginal revenue curve corresponding to the market demand curve. b) Find the equation for the marginal cost function. c) Find the profit-maximizing quantity of output for the monopoly and the price the...
A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price what is profit (assume there are no fixed costs)?

A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price what is profit (assume there are no fixed costs)?
Assume a monopolist faces a market demand curve P = 240 – 1⁄2Q and has the...

Assume a monopolist faces a market demand curve P = 240 – 1⁄2Q and has the short-run total cost function C = Q2. a. What is the profit-maximizing level of output and price? b. What are profits? c. What would price and output be if the firm priced at the socially efficient (competitive) level? d. What is the magnitude of the deadweight loss caused by monopoly pricing?

Q2) A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price, what is the resulting loss in th...

Q2) A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price, what is the resulting loss in the gains from trade? a) $8 b) $6 c) $12 d) $4 e) None of the above

Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Homework Answers

Add Answer to:
Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Post as a guest

Earn Coins

Suppose a monopolist’s costs are described by the function C(Q) = 7 + Q2 and the...

consider a monopolist who has a cost function of c(q) = 1/4 Q2 this monopolist faces...

Suppose a monopolist faces the following demand curve: P = 440 – 7Q. The long run marginal cost of production is constant and equal to $20, and there are no fixed costs. A) What is the monopolist’s...

A monopolist sells in two markets. The demand curve for her product is given by p1...

2. A monopolist serves a market with an aggregate demand function given by Q = 36...

A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and...

Part E-H Assume a profit-maximizing monopolist faces a market demand given by P = (12,000 –...

A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price what is profit (assume there are no fixed costs)?

Assume a monopolist faces a market demand curve P = 240 – 1⁄2Q and has the...

Q2) A monopolist has variable costs of VC = q2 and faces a demand curve of P = 24 – q, where P is price and q the quantity sold. If the monopolist sets a single price, what is the resulting loss in th...

Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Homework Answers

Add Answer to: Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....

Post as a guest

Earn Coins

Add Answer to:
Q2(b)(ii) A monopolist has a production function ?=?(?,?)=2∗(??)0.5 with ?=?=1 (input markets are competitive, as normal)....