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In: Economics

1. Mustapha maintains a monopoly in the holographic TV market because of its patent,but it is...

1. Mustapha maintains a monopoly in the holographic TV market because of its patent,but it is about to expire. The market demand and Mustapha’s production cost are given by:  P = 100 − 0.5? and ?? = 100 + 0.5Q2 The equilibrium price and quantity are:

a. Q = 50 units and P = $75.00

b. Q = 75 units and P = $60.00

c. Q = 60 units and P = $60.00

d. Q = 100 units and P = $85.00

2. Mustapha maintains a monopoly in the holographic TV market because of its patent but it is about to expire. The market demand and Mustapha’s production cost are given by:  P = 100 − 0.5? and ?? = 100 + 0.5Q2. The monopoly profit is.

a. $3,750.00

b. $2,400.00

c. $3,000.00

d. $2,500.00

3. Aji Fatou owns a rental space in New York and is thinking of opening a restaurant in that space. The total cost of operating the restaurant is C(Q) = 20Q, where Q is the number of customers at the restaurant in a day.

The market demand for restaurants is Q = 100 – p. Aji Fatou has the option of leasing out this space instead of opening a restaurant. The market rent for her property is $600. If Aji Fatou is operating as a perfectly competitive firm. Derive Aji Fatou's Accounting profit and Economic Profit.

a. Accounting Profit = $2,200 and Economic profit =$0.00

b. Accounting Profit = $0.00 and Economic profit = -$600

c.Accounting Profit = $600 and Economic profit =$0

d.Accounting Profit = $2,200 and Economic profit =$1,600

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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