A monopolist faces a market demand curve of q=100-p. The monopolist’s cost function is given by...

A monopolist faces a market demand curve of q=100-p. The monopolist’s cost function is given by (q) = 3000 + 20q.
a) If the monopolist can perfectly price discriminate, how many units will be sold?
b) If the monopolist can perfectly price discriminate, how much consumer surplus will there be?
c) If the monopolist cannot price discriminate, how much consumer surplus will there be? (For this question, think long run.)

Expert Solution

Rahul Sunny answered 2 years ago

A monopolist with the cost function C(q) = q faces the market demand curve p =...

A monopolist with the cost function C(q) = q faces the market demand curve p = 101 -2q. What is the maximum amount the monopolist is willing to pay for advertising that shifts its demand curve to p = 101-q?

Assume that a monopolist faces a demand curve given by: Q = 100 – P Also...

Assume that a monopolist faces a demand curve given by: Q = 100 – P Also assume that marginal costs are such that MC = 2Q. Calculate and graph the following: Find the profit maximizing price and output in this market under autarky. Now assume that the world price under free trade is $20 per unit. If the monopolist is a single price monopolist then find the profit maximizing output for this firm. Also find the amount imported under free...

A monopolist faces a market demand: P = 200 – Q. The monopolist has cost function...

A monopolist faces a market demand: P = 200 – Q. The monopolist has cost function as C = 1000 + Q2, and marginal cost MC = 2Q. ( 1) Solve for Marginal Revenue (MR) function. (2) Find the profit-maximizing quantity? Profit? (3) Suppose the monopolist decides to practice 3rd degree price discrimination. Without solving for the 3rd degree price discrimination, can you compare the new profit earned by the monopolist with the old profit?

Suppose a monopolist faces a market demand curve Q = 50 - p. If marginal cost...

Suppose a monopolist faces a market demand curve Q = 50 - p. If marginal cost is constant and equal to zero, what is the magnitude of the welfare loss? If marginal cost increases to MC = 10, does welfare loss increase or decrease? Use a graph to explain your answer

A monopolist faces a market demand curve given by QD= 100 – P/3 and has a...

A monopolist faces a market demand curve given by QD= 100 – P/3 and has a cost function described by C = 30Q +1.5Q2. Solve for the monopolist’s profit maximizing output and price. With reference to question 4 above, suppose the demand facing the monopolist increases to QD= 120 – P/2. Solve for the new profit maximizing values of price and quantity. Describe how the two answers differ and explain those differences in terms of the demand change. The market...

Acme is a monopolist who faces inverse market demand function P (Q, y) = 100 -...

Acme is a monopolist who faces inverse market demand function P (Q, y) = 100 - 2Q + y, where y is the quality level of Acme’s product. Acme has cost function function C(Q) = 20Q. Suppose quality is costly. Specifically, assume that Acme must pay innovation cost I(y)= (1/4)(y^2). Thus, Acme’s total profits are x(Q,y)=P(Q,y)Q - C(Q) - I(y). Assuming Acme is allowed to act like a monopolist, we will work out Acme’s optimal quality choice, y*. 1. Suppose,...

A monopolist faces a demand of P = -3Q + 400. The monopolist’s marginal cost is...

A monopolist faces a demand of P = -3Q + 400. The monopolist’s marginal cost is MC = 2Q + 80. The total cost for the monopolist is TC = Q2 + 80Q + 6000 a) Find the profit-maximizing quantity, price, and profit of the monopolist. b) A regulatory agency tries to force the monopoly to produce the same quantity as a competitive firm. Show what this price and quantity is and why the firm will eventually shut down rather...

A monopolist faces a market (inverse) demand curve P = 50 − Q . Its total...

A monopolist faces a market (inverse) demand curve P = 50 − Q . Its total cost is C = 100 + 10Q + Q2 . a. (1 point) What is the competitive equilibrium benchmark in this market? What profit does the firm earn if it produces at this point? b. (2 points) What is the monopoly equilibrium price and quantity? What profit does the firm earn if it produces at this point? c. (2 points) What is the deadweight...

A monopolist faces a single market with the following demand curve and total cost P =...

A monopolist faces a single market with the following demand curve and total cost P = 180 – 2.5Q and TC = 2Q2 i. Determine the quantity of output that it should produce and the price it should charge to maximize profit. Then, calculate the profit.

A monopolist has a cost function given by c(?)=?2 and faces a demand curve given by...

A monopolist has a cost function given by c(?)=?2 and faces a demand curve given by P(?)=120−y. (a)What is its profit-maximizing level of output? What price will the monopolist charge? (b)Calculate the deadweight loss imposed by the monopolist. Show also the deadweight loss in a graph (c)If you put a lump sum tax of $100 on this monopolist, what would its output be? (d)Suppose that you put a specific tax on the monopolist of $20 per unit output. What would...

Question