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In: Economics

Joy Industries is a monopolist in Happypur servicing COVID related socialization requirements of citizens.Joy industries faces...

Joy Industries is a monopolist in Happypur servicing COVID related socialization requirements of citizens.Joy industries faces the market demand curve Q=30-p and has a cost function C(Q)=0.5Q(square)

a. Find the profit maximizing Price and quantity resulting in profit to joy industries.

b.What is socially optimal price? How much dead weight loss does joy industries inflict on the market due to its monopoly profit maximization? Also calculate surplus and producer Surplus. Assume there is no fixed cost(just like we practically need nothing to produce happiness)

C. In response to a complaint recevied,the government puts a price ceiling of P=18 on joy industries.How much demand will joy industries serve? What profit will it earn in this process? Calculate the CS,PS and DWL? what are the reasons for a different value of DWL?

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Expert Solution

Rahul Sunny answered 1 year ago
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