Question
In: Economics
All questions below rely on the following assumptions: p=20-0.25Q MC=8= Average Cost (5 pts) If there...
All questions below rely on the following assumptions:
p=20-0.25Q
MC=8= Average Cost
- (5 pts) If there is a monopoly firm in this industry, what is the profit-maximizing P and Q?
And what is the total profit?
- (5 pts) What is the profit maximizing P and Q for the two-firm Cournot oligopoly?
And what is the total profit?
- (5 pts) Assume that are three firms with equal Qs in this Cournot oligopoly. What is the industry P and Q at the profit maximizing equilibrium?
And what is the total profit?
Solutions
Rahul Sunny answered 3 months agoRelated Solutions
All questions below rely on the following assumptions: ? = 20-0.25? ?? = 8 = Average...
All questions below rely on the following assumptions:
? = 20-0.25?
?? = 8 = Average Cost
a)What is the profit maximizing P and Q for the two‐firm Cournot
oligopoly? And what is the total profit?
b)Assume that are three firms with equal Qs in this Cournot
oligopoly. What is the industry P and Q at the profit maximizing
equilibrium? And what is the total profit?
P = 20 - .25Q MR = 20 – 0.5Q MC = 8 = Average Cost...
P = 20 - .25Q
MR = 20 – 0.5Q
MC = 8 = Average Cost
If the cost increases, what happens to the monopoly P, Q, and
Profit?
8. The table below shows the weekly marginal cost (MC) and average total cost (ATC) for...
8. The table below shows the weekly marginal cost (MC) and
average total cost (ATC) for Buddies, a perfectly competitive firm
that produces novelty ear buds in a competitive market. The market
price of ear buds is $6.00 per pair.
Quantity of Ear buds
MC ($)
ATC ($)
5
-
9
10
2
5.5
15
2.44
4.48
20
3.56
4.25
25
4.5
4.3
30
5.02
4.42
35
5.96
4.64
40
8.56
5.13
Instructions: In part a, enter your answer as...
Use the following set-up for all parts of question 5 (i.e., parts a through e). A monopolist produces its product at a constant average cost and marginal cost of $20 (i.e., AC=MC=20).
Use the following set-up for all parts of
question 5 (i.e., parts a through e). A monopolist produces its
product at a constant average cost and marginal cost of $20 (i.e.,
AC=MC=20). The market demand for its product is P = 70 – 0.2Q and
so its marginal revenue is MR= 70 – 0.4Q where P is the price per
unit of the product and Q is the number of units.a) (9 points) Suppose that the monopolist must charge the...
Suppose a monopolist has constant (average and marginal cost of AC = MC = 8) and...
Suppose a monopolist has constant (average and marginal cost of
AC = MC = 8) and faces demand such that QD = 100 -
P.
Derive MR curve
(hint: you can calculate TR with
Demand curve, then you can drive MR from TR)
Calculate a monopolist’s profit-maximizing Quantity and
Price
Calculate the equilibrium Price and Quantity in the
perfectly competitive market
Draw all curves (Demand, MR, and MC
curves)
Calculate Monopoly Profit and Dead Weight Loss
(DWL).
Comparing the profit-maximizing...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows
the weekly marginal cost (MC) and average total cost (ATC) for
Smitten, a perfectly competitive firm that produces children’s
mittens in a competitive market.
Smitten's
Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows the weekly marginal cost (MC) and average
total cost (ATC) for Smitten, a perfectly competitive firm that
produces children’s mittens in a competitive market.
Smitten's Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows the weekly marginal cost (MC) and average
total cost (ATC) for Smitten, a perfectly competitive firm that
produces children’s mittens in a competitive market.
Smitten's Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
10
$1.60
$5.00
15
2.00
4.00
20
2.45
3.61
25
3.55
3.60
30
4.00
3.67
35
5.50
3.93
40
6.00
4.19
45
8.50
4.67
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
5. A monopolist faces a demand curve P = 64−2Q. His marginal cost is MC =...
5. A monopolist faces a demand curve P = 64−2Q. His marginal
cost is MC = 16.
(a) Draw a graph to illustrate and calculate the profit
maximizing output and price.
(b) Calculate the efficient level of output and the DWL.
(c) Suppose the government gave the monopolist a subsidy of $4
per unit produced. Compute the profit maximizing output level and
the deadweight loss associated with this new output. Explain
intuitively why the DWL has changed.
A monopolist can produce a constant average (and marginal) cost of AC=MC=$5. It faces a market...
A monopolist can produce a constant average (and marginal) cost
of AC=MC=$5. It faces a market demand curve given by Q=53-P.
A)
Consider Problem 2 in the Homework 12
Supplement. Suppose a second firm enters the market. Let
Q1 be the output of the first firm and Q2 be the output of the
second. Market demand is now given by Q1+Q2 = 53-P. Assuming that
this second firm has the same costs as the first, how much will
each firm produce...
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