Suppose the inverse demand for a product produced by a single firm is given by P...

Suppose the inverse demand for a product produced by a single firm is given by P = 200 − 5Q and this firm has a marginal cost of production of MC = 20 + 2Q.

a. If the firm cannot price-discriminate, what is the profit-maximizing price and level of output for this monopolist? What are the levels of producer and consumer surplus in the market? What is the deadweight loss?

b. If the monopolist can practice perfect price discrimination, what output level will it choose? What are the levels of producer and consumer surplus and deadweight loss under perfect price discrimination?

c. Suppose that the monopolist’s marginal cost curve is now MC = 20. If the monopolist cannot perfectly price discriminate but can distinguish between students (with a demand curve of P = 100 − 10Q) and non-students (with a demand curve of P = 300 − 10Q), what will be the price it is charging to students and non-students? What will be the quantity it is selling to students and non-students?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Suppose the inverse demand for a product produced by a single firm is given by: P...

Suppose the inverse demand for a product produced by a single firm is given by: P = 76 – 4(Q) and this firm has a marginal cost of production of: MC = 10 1. If the firm cannot price-discriminate , what is the profit-maximizing a)price b)and level of output? 2. If the firm cannot price-discriminate , what is : a)the consumer surplus , b)the producer surplus c)the dead-weight loss 3. If the firm can practice perfect price discrmination,...

Suppose the inverse demand for a product produced by a single firm is given by: P...

Suppose the inverse demand for a product produced by a single firm is given by: P = 76 – 4(Q) and this firm has a marginal cost of production of: MC = 10 1. If the firm cannot price-discriminate , what is the profit-maximizing a)price? b)and level of output? 2. If the firm cannot price-discriminate , what is : a)the consumer surplus? b)the producer surplus? c)the dead-weight loss? 3. If the firm can practice perfect price...

B Problem 4 Suppose the inverse demand for a product produced by a single firm is...

B Problem 4 Suppose the inverse demand for a product produced by a single firm is given by. P = 200 – 5 Q and this firm has a marginal cost of production of MC = 20 + 2 Q Answer the following questions: If the firm cannot price-discriminate, what is the profit-maximizing price and level of output? If the firm cannot price-discriminate, what are the levels of producer and consumer surplus in the market? What is the deadweight loss?...

3. Suppose the inverse demand for a monopolist’s product is given by P (Q) = 150...

3. Suppose the inverse demand for a monopolist’s product is given by P (Q) = 150 – 3Q The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC1 = 6Q1 While the marginal cost of producing in plant 2 is MC2 = 2Q2 (Kindly answer clearly) a) How much output should be produced in each plant? b) What price should be charged?

Suppose the demand for a product faces by a monopolist firm is given by P= 120...

Suppose the demand for a product faces by a monopolist firm is given by P= 120 - 2Q. If the marginal cost of producing the product is $20, what is the profit maximization price the firm should charge for the product? What are the firm's profits? Show the work.

Suppose the inverse demand and inverse supply functions for a good are given as P= 200-0.5Q...

Suppose the inverse demand and inverse supply functions for a good are given as P= 200-0.5Q and P= 20 + 0.5 Q. Calculate the initial equilibrium price and quantity. Draw the above inverse demand and inverse supply functions. Suppose a per unit tax of $10.00 was levied on sellers. Determine graphically and algebraically the effect of the tax on the price paid by demanders, the price received by sellers, the total tax paid, and the fraction of the tax paid...

Suppose that the (inverse) demand curve for Cranberries is given by P = 40 − 6Q...

Suppose that the (inverse) demand curve for Cranberries is given by P = 40 − 6Q and TC = $4Q + $3Q2 What is equilibrium Price and Quantity and Profit if the market is competitive? What is equilibrium Price and Quantity and Profit if there are two firms in the market (note Q = q1 + q2)? What is equilibrium Price and Quantity and Profit if there are monopoly in the market (note Q = Q)? If there were 3...

Suppose that the (inverse) demand curve for Cranberries is given by P = 40 − 6Q...

Suppose that the (inverse) demand curve for Cranberries is given by P = 40 − 6Q and TC = $4Q + $3Q2 What are four conditions required for a competitive market? What is equilibrium Price and Quantity and Profit if the market is competitive? What is equilibrium Price and Quantity and Profit if there are two firms in the market (note Q = q1 + q2)? What is equilibrium Price and Quantity and Profit if there are monopoly in the...

The inverse demand curve for a product using resource X is given by P = 60...

The inverse demand curve for a product using resource X is given by P = 60 – 0.2Q and the cost of production is constant at MC = 10 1. Find the static equilibrium for this product (recall at equilibrium Supply equates Demand and in this case Supply = Marginal Cost) (call this t0). 2. Draw the static equilibrium. 3. What is the value of consumer surplus from consumption in t0? (recall, this is simply the area under the demand...

I. Suppose the inverse demand function for a monopolist’s product is given by ? = 150...

I. Suppose the inverse demand function for a monopolist’s product is given by ? = 150 − 2? and the total cost function is given by ?? = 100 + 30? 1. Determine the profit-maximizing price and quantity 2. Determine the maximum profits II. Suppose the inverse demand function for a monopolistically competitive firm’s product is given by ? = 100 − 2? and the cost function is given by ?? = 52 + 4? 1. Determine the profit-maximizing price...

Subjects