Question
In: Economics
The inverse demand for the monopolist's output is P = 240 − 20q and its marginal...
The inverse demand for the monopolist's output is P = 240 − 20q and its marginal cost is MC = 40. Find the prot maximizing price (Pm) and the quantity for the monopolist (qm).
If the demand and marginal cost functions in question belonged above to a perfectly competitive rm, what would be the price (Ppc) and the quantity (qpc)? What is the deadweight loss due to the monopoly?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
The inverse demand function for video games is p = 240 ? 2q and the inverse...
The inverse demand function for video games is p = 240 ? 2q and
the inverse supply function is p = 3 + q. The government imposes a
$6 tax on each video game purchased. a) Find CS and PS before
tax
b. Find CS and PS after tax
c. Does the CS fall by more than the PS or
not?
(SHOW THE PROOF USING VALUES
OF ELASTICITES OF DEMAND AND SUPPLY)
Suppose that the inverse demand function for a monopolist's product is: p=7-(Q/20) Its cost function is:...
Suppose that the inverse demand function for a monopolist's
product is: p=7-(Q/20)
Its cost function is: C=10+14Q-4Q^2+(2Q^3/3)
Marginal revenue equals marginal cost when output equals: q=_
units and q=_units (Enter numeric responses using real numbers
rounded to three decimalplaces.)
What is the profit maximizing output?
2. Suppose the (inverse) market demand for solar panels is p= 1500 − 20Q and the...
2. Suppose the (inverse) market demand for solar panels is p=
1500 − 20Q and the (inverse) market supply is p= 10Q
a. Find the competitive market equilibrium price and quantity.
b. Each solar panel sold reduces pollution by 1 unit, and each
unit reduction in pollution has a benefit of $300 to the rest of
society. What is the optimal quantity of solar panels for
society?
c. What is the deadweight loss to society of the competitive
equilibrium outcome?...
Your inverse demand curve for medical care is given by P = 220-20Q, where P is...
Your inverse demand curve for medical care is given by P =
220-20Q, where P is the market price and Q is the number of units
you demand. Suppose the market price of medical care is $200 per
unit, and you have an insurance plan that has a $2000 deductible
and a coinsurance rate of .20 once that deductible is met. Use this
information to answer parts a and b.
a. Graph the price line and your demand curve. On...
Your inverse demand curve for medical care is given by P = 220-20Q, where P is...
Your inverse demand curve for medical care is given by P =
220-20Q, where P is the market price and Q is the number of units
you demand. Suppose the market price of medical care is $200 per
unit, and you have an insurance plan that has a $2000 deductible
and a coinsurance rate of .20 once that deductible is met.Use this
information to answer parts a and b.
I. Graph the price line and your demand curve. On the...
Suppose the inverse demand for physician office visits is P = 1000 - 20Q. Now suppose...
Suppose the inverse demand for physician office visits is P =
1000 - 20Q. Now suppose
an insurance policy provides a co-insurance rate of 50%. Graph
the old and the new
demand functions (with and without health insurance) and mark
their intercepts on the
Price (vertical) and Quantity (horizontal) axes.
A monopolist faces the inverse demand for its output: p = 30 − Q. The monopolist...
A monopolist faces the inverse demand for its output: p = 30 −
Q. The monopolist also has a constant marginal and average cost of
$4/unit.
(a) (10 points) What is the monopolist’s profit-maximizing level
of output? What is the monopolist’s profit at this level of
output?
(b) (10 points) Calculate the consumer surplus and show it in a
graph along with the monopolist’s equilibrium; label the
monopolist’s equilibrium e M.
(c) (2.5 points) What would the competitive equilibrium be...
Demand for education is characterized by the following equation: P = 240 – 4Q. The marginal...
Demand for education is characterized by the following equation:
P = 240 – 4Q. The marginal private cost of education is P = 40 +
6Q. Production of education also creates a per unit positive
externality equal to 2Q. Suppose that the market is currently
unregulated (i.e., the positive externality is not currently being
corrected for in the market). What is output and price? The
marginal social benefit (MSB) accounts for the marginal private
benefit of production as well as...
An industry's inverse demand was P^D = 20 - 0.1Q and its inverse supply was P^S...
An industry's inverse demand was P^D = 20 - 0.1Q and its inverse
supply was P^S = 4 + 0.1Q.
Calculate the consumer surplus, producer surplus, government
revenue and deadweight loss for taxes of $4, $8, $12 and $16 per
unit sold.
Graph government revenue and deadweight loss as functions of
these tax rates.
What tax maximizes government revenue?
1) Assuming an inverse demand (marginal benefit) equation of P = 1300 ? 0.4Q, and a...
1) Assuming an inverse demand (marginal benefit) equation of P =
1300 ? 0.4Q, and a supply (marginal cost) equation of P = 200, a.
If there are 1,000 units of the resource to be allocated between
two years, in a dynamic efficient allocation, how much would be
allocated in the first year and how much would be allocated to the
second year if the discount rate is 35%? (5 points) b. What would
be the efficient price in the...
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