Assume you're a monopolist facing market demand described by Qd: P=$90,000-Q, where P is the per...
Assume you're a monopolist facing market demand described by Qd: P=$90,000-Q, where P is the per unit price customers are willing and able to pay and Q is the quantity available for them to purchase. If you have constant marginal costs of MC=$18,000 (thus AVC is also $18,000) and fixed costs of $50,000,000, decide the optimal quantity you should furnish to the market, Q*, the price you'll be able to charge P*, and the level of profit you'll earn during the production and marketing cycle, π*. Compute and reveal the level of consumer surplus as the result of transactions in this market. Now, compute and reveal the level of producer surplus with which pay your fixed costs, the "leftover," your profit, π.
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Assume you're a monopolist facing market demand described by Qd:
P=$90,000-Q, where P is the per...
Consider a monopolist with the cost function C(q) = 6q, facing the market demand function D(p)...
Consider a monopolist with the cost function C(q) = 6q, facing the market demand function D(p) = 20 − 2p. (a) Find the monopoly quantity and price, the monopolist’s profit and the con- sumer surplus. (b) Now suppose that the government gives to the monopolist a subsidy of $2 per unit sold. Find the monopoly quantity and price, the monopolist’s profit, the consumer surplus, and the cost of the subsidy. (c) How does this subsidy affect total surplus (taking into...
7. A monopolist in the market for widgets is facing a demand curve P= 60 -...
7. A monopolist in the market for widgets is facing a demand curve P= 60 - Q. The marginal cost of producing Q units is equal to $Q. (a) Calculate the monopolist's profit maximizing price and quantity. Calculate producer, consumer, and total surplus, and deadweight loss. (b) The government wants to impose a price ceiling that will maximize the total surplus in the market. What price ceiling should the government set? What would be the new values of consumer and...
1. Assume that a monopolist has TC(Q) = 6Q and the market demand is P(Q) =...
1. Assume that a monopolist has TC(Q) = 6Q and the market demand is P(Q) = 50 – 20. (a) What is the firm's marginal cost? (b) What is the profit-maximizing price and quantity (P*, Q*)? (c) What is the total revenue at (P*, Q*)? (d) What is the total cost at (P*, Q*)? (e)What is the profit at (P*, Q*)? (f) What is the consumer surplus at (P*, Q*)? (g) What is the deadweight loss at (P*, Q*)?
1. Let the market demand curve be P=1000 - 10Q. Assume the market is controlled by...
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...
Consider a single-price monopolist (i.e. the monopolist cannot price discriminate) facing the following market demand curve:...
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...
Suppose that market demand for a good is given by QD(P) = 10−P. The total cost...
Suppose that market demand for a good is given by
QD(P) = 10−P. The total cost of production is TC(Q) =
2Q2. Determine quantity QM and price
PM that a monopolist will choose in this market.
Calculate consumer surplus (CS), producer surplus (PS), and the
deadweight loss (DWL) resulting from the monopoly. Graphical
Solution would suffice!
1) (25 points) Suppose that market demand for a good is given by Q”(P) - 10-P. The total cost of production is TCQ) =...
6. The market demand is given by p() 36 q and a monopolist has the following...
6. The market demand is given by p() 36 q and a monopolist has the following (a) If the monopolist charges a uniform price (fixed price per ut), how much (b) If the monopolist can perfectly price discriminate (first degree), how muclh (c) How much extra surplus does the monopolist capture by price discriminating cost function TC() 24q would she produce and what is the price? What is the profit? would she produce? What is her profit? instead of charging...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is average weekly household income, and that the firm's marginal cost function is given by MC(Q) 2Q. The firm has no fixed costs. = (a) If the average weekly household income is $600, find the firm's marginal revenue function. (b) What is the firm's profit-maximizing quantity of output? At what price will the firm sell that output? What will the firm's marginal cost be? (c)...
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)?
A monopolist faces a market demand curve given by
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...
7. A monopolist in the market for widgets is facing a demand curve P= 60 - Q. The marginal cost of producing Q units is equal to $Q. (a) Calculate the monopolist's profit maximizing price and quantity. Calculate producer, consumer, and total surplus, and deadweight loss. (b) The government wants to impose a price ceiling that will maximize the total surplus in the market. What price ceiling should the government set? What would be the new values of consumer and...
1. Assume that a monopolist has TC(Q) = 6Q and the market demand is P(Q) = 50 – 20. (a) What is the firm's marginal cost? (b) What is the profit-maximizing price and quantity (P*, Q*)? (c) What is the total revenue at (P*, Q*)? (d) What is the total cost at (P*, Q*)? (e)What is the profit at (P*, Q*)? (f) What is the consumer surplus at (P*, Q*)? (g) What is the deadweight loss at (P*, Q*)?
Suppose that market demand for a good is given by
QD(P) = 10−P. The total cost of production is TC(Q) =
2Q2. Determine quantity QM and price
PM that a monopolist will choose in this market.
Calculate consumer surplus (CS), producer surplus (PS), and the
deadweight loss (DWL) resulting from the monopoly. Graphical
Solution would suffice!
1) (25 points) Suppose that market demand for a good is given by Q”(P) - 10-P. The total cost of production is TCQ) =...
6. The market demand is given by p() 36 q and a monopolist has the following (a) If the monopolist charges a uniform price (fixed price per ut), how much (b) If the monopolist can perfectly price discriminate (first degree), how muclh (c) How much extra surplus does the monopolist capture by price discriminating cost function TC() 24q would she produce and what is the price? What is the profit? would she produce? What is her profit? instead of charging...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is average weekly household income, and that the firm's marginal cost function is given by MC(Q) 2Q. The firm has no fixed costs. = (a) If the average weekly household income is $600, find the firm's marginal revenue function. (b) What is the firm's profit-maximizing quantity of output? At what price will the firm sell that output? What will the firm's marginal cost be? (c)...
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