Question
In: Economics
The following equations describe a firm’s demand, marginal revenue, total cost, & marginal cost: Demand: P...
The following equations describe a firm’s demand, marginal revenue, total cost, & marginal cost:
Demand: P = 1,000 – 10Q
Total Cost: TC = 500 + 10Q + Q^2
Marginal Revenue: MR = 1,000 – 20Q
Marginal Cost: MC = 10 + 2Q
a. What level of output should be produced to maximize profits?
b. What is the market price?
c. How much profit will be earned?
d. The firm sells cereal and competes with other firms selling slightly differentiated cereal products. What type of market is this firm operating in?
The following equations describe a firm’s total cost and marginal cost:
Total Cost: TC = 500 + 10Q + Q^2
Marginal Cost: MC = 10 + 2Q
e. If the firm is a price taker and other firms in the industry sell output at a price of $100, what price should the manager of this firm put on the product?
f. What level of output should be produced to maximize profits?
g. How much profit will be earned?
h. The firm sells orange juice, which is a perfect substitute, at a farmers market. What type of market is this firm operating in?
Solutions
Rahul Sunny answered 8 months agoRelated Solutions
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its
product:
Q = 200 - 2P MR = 100 - Q TC = 5Q MC = 5
a) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the price...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 ; MR = 100-Q ; TC = 5Q ; MC = 5
a) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing...
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve...
A monopolist faces the following demand curve, marginal revenue,
total cost curve and marginal cost curve for its product: Q = 200 -
2P ; MR = 100 - Q ; TC = 5Q ; MC = 5
a) What level of output maximizes total revenue?. b) What is the
profit maximizing level of output?. c) What is the profit
maximizing price?. d) How much profit does the monopolist earn? e)
Suppose that a tax of $5 for each unit...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 - 2P MR = 100 - Q TC = 5Q MC = 5 a. What is the profit
maximizing level of output? (10 pts.) b. What is the profit
maximizing price? (8 pts.) c. How much profit does the monopolist
earn? (10 pts.)Immersive Reader (28 Points)
14. Consider a monopoly facing the following demand, marginal revenue, total cost, and marginal cost curves:...
14.
Consider a monopoly facing the following demand, marginal revenue,
total cost, and marginal cost curves:
Demand curve: P = 12 – 0.002 Q
Marginal revenue curve: MR = 12 – 0.004 Q
Total cost curve: TC = 3Q +0.0005Q2
Marginal cost curve: MC = 3 + 0.001 Q
a. Calculate the profit maximizing output of this monopoly.
Briefly explain your answer.
b. What is the socially efficient output level? Briefly explain
your answer.
c. Suppose the government wants to...
Suppose that the inverse demand function, marginal revenue, marginal cost and total cost for a gizmo...
Suppose that the inverse demand function, marginal revenue,
marginal cost and total cost for a gizmo product produced by a
monopolist are as follows:
P = 100 - 2Q
MR = 100 - 4Q
MC = 2
TC = 10 + 2Q
a. Find the monopolist's profit-maximizing output and price.
b. calculate the monopolist's profit/losses, if any.
c. What is the Lerner Index for this industry.
suppose that the inverse demand function, marginal revenue, marginal cost and total cost for a gizmo...
suppose that the inverse demand function, marginal revenue,
marginal cost and total cost for a gizmo product produced by a
monopolist are as follows
p=100 -2Q
MR= 100-4Q
MC=2
TC=10+2Q
a. Find the monopolist's profit maximizing output and price.
b. Calculate the monopolist's profit/loss ,if any
c. What is the Lerner Index for this industry
In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total...
In using the graph for a monopolist, with demand, marginal
revenue, marginal cost, and average total cost curves, explain how
you find the profit maximizing level of output. (Note that this
question asks about OUTPUT. The next question asks about
PRICE.)
Profits are maximized at the quatnity where total revenue is
highest above total cost
Profits are maximized at the quantity where ATC hits its
minimum
Profits are maximized at the quantity where marginal revenue
equals marginal cost
Profits are...
A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average...
A. draw a graph showing the marginal cost, average total cost,
demand, marginal revenue, and average revenue for a perfectly
competitive firm. Indicate the level of profit where profit is
maximized, shade in the area of maximum profit, give the amount of
maximum profit, and explain how this number is calculated.
B.Graph the short-run supply curve for a perfectly competitive
firm and explain where this short-run supply curve lies. Indicate
the following curves on your graph: marginal cost curve, marginal...
Fill in the missing data for price (P), total revenue (TR), marginal revenue (MR), total cost...
Fill in the missing data for price (P), total revenue (TR),
marginal revenue (MR), total cost (TC), marginal cost (MC), profit
(π), and marginal profit (Mπ) in the following table:
Q
P
TR=P×Q
MR=ΔTR/ΔQ
TC
MC=ΔTC/ΔQ
π
Mπ=Δπ/ΔQ
0
$160
$0
0
$0
0
$0
0
1
150
150
150
25
25
125
125
2
140
280
130
55
30
225
100
3
130
390
110
90
35
300
75
4
120
480
90
130
40
350
50
5
110...
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