DD is a monopolist firm. Its cost is C=100-5Q+Q2 and demand is P=55-2Q. What price should...

DD is a monopolist firm. Its cost is C=100-5Q+Q2 and demand is P=55-2Q.

What price should DD set to maximize profit and what output does the firm produce? How much is the profit?
What would be output if DD acted like a perfect competitor and set MC=P ? What is the profit?
What is the deadweight loss from monopoly power in (a). Show graphically

Suppose the government, concerned about the high price of DD, sets a maximum price for DD’s product at k27. How does this affect price, quantity, consumer surplus and DD’s profit? What is the resulting deadweight loss? (5 marks

Expert Solution

Rahul Sunny answered 2 years ago

The total cost (TC) and inverse demand equations for a monopolist are: TC=100+5Q^2 P=200?5Q a. What...

The total cost (TC) and inverse demand equations for a monopolist are: TC=100+5Q^2 P=200?5Q a. What is the profit-maximizing quantity? b. What is the profit-maximizing price? c. What is the monopolist's maximum profit? The demand equation for a product sold by a monopolist is Q=25?0.5P TC=225+5Q+0.25Q^2 a. Calculate the profit-maximizing price and quantity. b. What is the monopolist's profit?

suppose the a domestic monopolist has cost c= 50+.25q^2 .home demand is p = 100-.5q what...

suppose the a domestic monopolist has cost c= 50+.25q^2 .home demand is p = 100-.5q what is the monopolist level of outprice and profoits in xlosed economy suppose open for world a trade and world prive is 40 and domestic firm faces world market how much the country import and export fi d the consumer and producer surplus. with free trade comapre trade profit worh monopolist output which is higher explain

The market demand function for a monopolist is p=58-2Q and its cost is C(Q)=10Q. a) Determine...

The market demand function for a monopolist is p=58-2Q and its cost is C(Q)=10Q. a) Determine the monopolist’s price and quantity in equilibrium. b) Suppose now that a competition authority forces the monopolist to employ marginal cost pricing. Determine the price and the quantity with this new pricing scheme. c) Compute and compare the consumer surplus, the firm’s profit, and the social welfare under unrestricted monopoly and under marginal cost pricing. What is the deadweight loss due to unrestricted monopoly pricing?

Industry demand is given by : P = 100-2Q The total cost for the individual firm...

Industry demand is given by : P = 100-2Q The total cost for the individual firm of which there are 4, is given by: TCi = 10qi + qi^2 If the 4 firms form a cartel what will be the price and output if the cartel is centralized and the cartel is decentralized As we know cheating is a problem with cartels what would happen to price and output if the cartel breaks down?

Suppose a first degree price discriminating monopolist has an inverse demand curve of P=100-2Q and a...

Suppose a first degree price discriminating monopolist has an inverse demand curve of P=100-2Q and a marginal cost curve of MC=10+4Q. Assume fixed costs are zero. What is the firm's maximum profit?

The inverse market demand for clothing is P=48–2Q and the cost function is C=Q2. 1 Calculate...

The inverse market demand for clothing is P=48–2Q and the cost function is C=Q2. 1 Calculate the optimal profit of a monopolist. Assume now that the monopolist can choose whether to continue operating in the market as a monopolist or set up two branches that operate in the market as Cournot duopolists (duopolist branching). Each branch will face the same quadratic cost function as the original monopolist. 2 Calculate the optimal profit under the duopoly branching. Will the firm prefer...

A monopolist is facing the following demand curve P = 50 − 5Q. The monopolist has...

A monopolist is facing the following demand curve P = 50 − 5Q. The monopolist has the following marginal cost MC = 10. The monopolist knows exactly the willingness to pay of each individual consumer and charge consumers individual prices. Calculate the monopolist’s profit (assuming FC=0). (a) π=40 (b) π=80 (c) π = 160 (d) None of the above.

Suppose a monopolist faces consumer demand given by P=500-5Q with a constant marginal cost of $20...

Suppose a monopolist faces consumer demand given by P=500-5Q with a constant marginal cost of $20 per unit (where marginal cost equals average total cost. assume the firm has no fixed costs). If the monopoly can only charge a single price, then it will earn profits of?

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.

The inverse demand curve a monopoly faces is p = 100 - 2Q The firm's cost...

The inverse demand curve a monopoly faces is p = 100 - 2Q The firm's cost curve is C (Q) = 20 + 6Q What is the profit-maximizing solution? The profit-maximizing quantity is _______. (Round your answer to two decimal places.) The profit-maximizing price is $________. (Round your answer to two decimal places.) What is the firm's economic profit? The firm earns a profit of $________. (Round your answer to two decimal places.) How does your answer change if C(Q)...

Question