Question
In: Economics
A firm faces the demand curve: P = 4,762 - 5Q. What is the firm’s revenue...
A firm faces the demand curve: P = 4,762 - 5Q. What is the firm’s revenue maximizing price
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Monopolistic firm has the inverse demand function p = 250 – 5Q. Firm’s total cost of...
Monopolistic firm has the inverse demand function p = 250 – 5Q.
Firm’s total cost of production is C = 1250 + 10Q + 8Q2
:
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will you continue the production at
the profit-maximizing level of output? Show why or why not?
3. Calculate the Lerner Index of...
A firm faces the demand curve P=80 - Q. What is the output level that maximizes...
A firm faces the demand curve P=80 - Q. What is the output level
that maximizes
total revenue? Its total cost curve is given by C = 50 +
0.2Q2 . Set up the profit function
π=f (Q) and find the output level that will maximize its
profit.
Firm A sells a good and faces an inverse demand curve of P = 120 –...
Firm A sells a good and faces an inverse demand curve of P = 120 –
Q, has constant marginal costs of 60 and no fixed costs
(c) For each of the following four situations: (1) state
whether you would expect quantities Qa and Qb to rise, stay the
same or fall, and (2) provide a brief (two to three sentence
maximum) explanation. Note: I’m not looking for nor expecting *any*
calculation here. A brief explanation of how and why...
Suppose that a firm faces the demand curve, P = 100 - 3Q, where P denotes...
Suppose that a firm faces the demand curve, P = 100 - 3Q, where
P denotes price in dollars and Q denotes total unit sales. The cost
equation is TC = 200 + 22Q.
a. Determine the firm’s profit-maximizing output and
price.
b. Suppose that there is a change in the production process so
that the cost equation becomes TC = 80 + 12Q + Q2.
Determine the resulting effect on the firm’s
output:
c. Using the two...
A firm with market power faces an inverse demand curve of P = 100 – 10Q....
A firm with market power faces an inverse demand curve of P =
100 – 10Q. Assume that the firm faces a marginal cost curve of MC =
10 + 10Q.
(4)a. If the firm cannot price discriminate, what are the profit
maximizing levels of output and price?
(4)b. Given you answers in part “a,” what are the values of
consumer surplus, producer surplus and deadweight welfare loss?
(4)c. If the firm is able to practice first degree (perfect)
price...
A monopolist faces the following average revenue (demand) curve: P = 100 – 0.01Q Where Q...
A monopolist faces the following average revenue
(demand) curve:
P = 100 –
0.01Q
Where Q is weekly
production and P is price, measured in cents per unit. The firm’s
cost function is given by C = 50Q + 30,000. Assume that the firm
maximizes profits.
What is the level of production, price, and total
profit per week?
If the government decides to levy a tax of 10 cents
per unit on this product, what will be the new level...
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Monopolistic firm faces the inverse demand function p = 250 – 6Q. Firm’s total cost of...
Monopolistic firm faces the inverse demand function p = 250 –
6Q. Firm’s total cost of production is C = 1250 + 10Q +
8Q2 :
1. Create a spreadsheet for Q = 1 to Q
= 20 in increments of 1. Determine the profit-maximizing output and
price for the firm and the consequent level of profit.
2. Will the firm continue the
production at the profit-maximizing level of output? Show why or
why not?
3. Calculate the Lerner Index...
Suppose the firm is a monopolist. It faces a downward-sloping demand curve, P(Q). If it also...
Suppose the firm is a monopolist. It faces a downward-sloping
demand curve, P(Q). If it also has non-negative marginal cost, will
it choose a quantity on the demand curve where the price elasticity
of demand is less than, greater than, or equal to -1? Explain.
Two Hints: First, recall that R(Q) = P(Q) times Q, and that the
price elasticity of demand is defined as .
Second, recall the condition MR = MC. Think about how the firm’s
revenue will...
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