Marshmallow fluff is a local monopoly firm. We have its marginal cost and marginal revenue as...

Marshmallow fluff is a local monopoly firm. We have its marginal cost and marginal revenue as follows: MC=80+2Q and MR=200-Q. (

a) Calculate consumer surplus (CS) and deadweight loss (DWL)

b) Graphically illustrate your answers.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

The Marginal Revenue curve facing a monopoly firm is a) identical to its demand and average...

The Marginal Revenue curve facing a monopoly firm is a) identical to its demand and average revenue curve. b) perfectly elastic. c) below its demand and average revenue curve. d) the same as it is for a perfectly competitive firm. For a firm in a perfectly competitive market a) The firm must decrease price if it wants to sell an additional unit of the product b) The demand curve is downward sloping c) Price = Average Revenue = Marginal Revenue...

The marginal revenue curve of a monopoly crosses its marginal cost curve at $31 per unit,...

The marginal revenue curve of a monopoly crosses its marginal cost curve at $31 per unit, and an output of 2 million units. What is the profit-maximizing (loss-minimizing) output? () million units. The price that consumers are willing to pay for this output is $39 per unit. If it produces this output, the firm's average total cost is $41 per unit, and its average fixed cost is $5 per unit. What are the firm's economic profits (or economic losses)? $()

A firm is a natural monopoly. Its marginal cost curve is flat, and its average cost...

A firm is a natural monopoly. Its marginal cost curve is flat, and its average cost curve is downward sloping (because it has a fixed cost). The firm can perfectly price discriminate. Show that a monopoly might shut down if it can only set a single price but will operate if it can perfectly price discriminate.

Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves.

Assignment: Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted) Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits and Does price discrimination lead to a more efficient or less efficient outcome?...

If marginal cost exceeds marginal revenue, the firm A)should reduce its average fixed cost in order...

If marginal cost exceeds marginal revenue, the firm A)should reduce its average fixed cost in order to lower its marginal cost. B)may still be earning a positive accounting profit C)should increase the level of production to maximize its profit. D)is most likely to be at a profit-maximizing level of output. Who is a price taker in a competitive market? A)both buyers and sellers B)buyers only C)sellers only D)neither buyers nor sellers For a competitive firm, A)total cost equals marginal revenue....

11. A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue will

11. A perfectly competitive firm is producing at the point where its marginal cost equals its marginal revenue. If the firm boosts its output, its total revenue willA) rise and its total variable cost will rise even more.B) rise and its total variable cost will rise, but not by as much.C) fall but its total variable cost will rise.D) fall and its total variable cost will fall, but not by as much.12. Bob's Lawn Care Services is a perfectly competitive...

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 a monopoly faces the demand, marginal revenue, and cost schedules below. Quantity Price Marginal...

Suppose that a monopoly faces the demand, marginal revenue, and cost schedules below. Quantity Price Marginal Revenue Marginal Cost Average Total Cost 1 230 230 100 150 2 210 190 100 125 3 190 150 100 116.6666667 4 170 110 100 112.5 5 150 70 100 110 6 130 30 100 108.3333333 7 110 -10 100 107.1428571 8 90 -50 100 106.25 9 70 -90 100 105.5555556 10 50 -130 100 105 What quantity maximizes profit? The monopoly Q =...

For a monopoly, profit per unit of output is? A-marginal revenue minus marginal cost B-price minus...

For a monopoly, profit per unit of output is? A-marginal revenue minus marginal cost B-price minus average total cost C-average total cost minus marginal revenue D-price minus marginal revenue E-total revenue minus total cost

Subjects