Based on market research, a monopolist obtains the following information about the market demand and production...

Based on market research, a monopolist obtains the following information about the market demand and production costs:

Demand: ? = 1,000 − 10?

Marginal Revenue: ?? = 1,000 − 20?

Marginal Cost: ?? = 100 + 10?

where ? is the quantity and ? is the price.

a. Draw demand, MR and MC curves. Clearly display the price and quantity the monopolist chooses. Y-axis measures costs ($) and X-axis measures quantity in your graph.

b. Find the price and quantity that maximize the firm’s profit.

c. Calculate the total surplus and deadweight loss from monopoly.

d. Find the price and quantity that maximize social welfare (total surplus).

Expert Solution

Rahul Sunny answered 9 months ago

Based on market research, a film production company in Ectenia obtains the following information about the...

Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P= 1,000- 10Q Total Revenue: TR= 1,000Q- 10Q2 Marginal Revenue: MR= 1,000- 20Q MC= 100 + 10Q where Q indicates the number of copies sold and P is the price in Ectenian dollars. Complete the following table by finding the price and quantity that maximize the company’s profit and the price and quantity that maximize...

Market research has revealed the following information about the market for chocolate bars: The demand schedule...

Market research has revealed the following information about the market for chocolate bars: The demand schedule can be represented by the equation Qd = 120 – 20P, where Qd is the quantity demanded and P is the market price. The supply schedule can be represented by the equation Qs = 20 + 30P, where Qs is the quantity supplied. Find the following: a. The equilibrium price and quantity. b. Suppose that the price is $3. Determine Qd and Qs. c....

Consider a monopolist that pollutes and we know the following about the market: Demand ... 1....

Consider a monopolist that pollutes and we know the following about the market: Demand ... 1. Consider a monopolist that pollutes and we know the following about the market: Demand is given by Q=10-P. Total private costs of production is C=2*Q Marginal external costs, or damages, are $6/unit, or MEC=6 Regulators are trying to decide what to do and need you to evaluate the net benefits of 3 different scenarios: i. Leave the firm alone. Don’t regulate and let it...

1. [Market Equilibrium] Following table shows information about the demand for apples in the wholesale market....

1. [Market Equilibrium] Following table shows information about the demand for apples in the wholesale market. Price, P ($/lb) Quantity Qd (lbs) 10 0 8 4 6 8 4 12 2 16 (a) Draw a graph with Price (P) on the vertical axis and Quantity demanded (Qd) on the horizontal axis? (b) Write the equation for this inverse demand function. (c) What is the quantity demanded when P = $3/lb? Following table shows information about the supply of 20 lbs...

A monopolist faces a single market with the following demand curve and total cost P =...

A monopolist faces a single market with the following demand curve and total cost P = 180 – 2.5Q and TC = 2Q2 i. Determine the quantity of output that it should produce and the price it should charge to maximize profit. Then, calculate the profit.

Monopco is a monopolist in the market for widgets, Q. The market demand curve for widgets...

Monopco is a monopolist in the market for widgets, Q. The market demand curve for widgets is given by p=24-Q, and its marginal revenue curve is MR=24-2Q. It also has average total cost curve ATC=Q and marginal cost curve MC=2Q. (a)Draw an accurate diagram showing Monopco’s D, MR, MC and ATC curves. (b) Find how many widgets Monopco produces, and the price it charges per widget. Compare these to the “efficient” price and quantity. (c) Calculate the profits earned by...

A monopolist faces a market demand: P = 200 – Q. The monopolist has cost function...

A monopolist faces a market demand: P = 200 – Q. The monopolist has cost function as C = 1000 + Q2, and marginal cost MC = 2Q. ( 1) Solve for Marginal Revenue (MR) function. (2) Find the profit-maximizing quantity? Profit? (3) Suppose the monopolist decides to practice 3rd degree price discrimination. Without solving for the 3rd degree price discrimination, can you compare the new profit earned by the monopolist with the old profit?

Suppose the market for burritos in Collegetown is dominated by one large monopolist. Market demand for...

Suppose the market for burritos in Collegetown is dominated by one large monopolist. Market demand for burritos and marginal revenue are given by the equations Qd = 120 - P MR = 120 - 2Q where P is the price of burritos and Q is the quantity of burritos. Suppose furthermore that the total cost and marginal cost of producing burritos are given by the equations TC = 10 + 60Q + Q^2 (Q^2 means Q squared) MC = 60...

Suppose there is a monopolist in the market for a specific video game facing a demand...

Suppose there is a monopolist in the market for a specific video game facing a demand curve: P = 20 - 0.5Q. The monopolist marginal cost curve is MC = 4, its total variable costs are TVC = 4Q and it faces a total fixed costs equal TFC = $78. Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places. a) Graph the demand curve and marginal cost...

Following table shows information about the demand for 20 lbs box of apples in the wholesale market.

Following table shows information about the demand for 20 lbs box of apples in the wholesale market.Price, P ($/box)Quantity Qd (boxes)10008020604040602080(a) Draw a graph with Price (P) on the vertical axis and Quantity demanded (Qd)on the horizontal axis?(b) Write the equation for this inverse demand function.(c) What is the quantity demanded when P = $50/box)?Following table shows information about the supply of 20 lbs box of apples in thewholesale market.Price, P ($/box)Quantity Qd (boxes)002020404060608080(i) Draw a graph with Price (P)...

Question