Question
In: Economics
Assume a profit maximizing monopolist faces the following demand, marginal revenue and cost functions:
Assume a profit maximizing monopolist faces the following demand, marginal revenue and cost functions: Demand: P = 400 - 50Q Total Cost: TC = 100Q Marginal cost MC = 100 Marginal Revenue MR = 400 – 100Q
a) Find the profit maximizing output level for the monopolist.
b) At this level of output what price will the monopolist charge?
c) What is the total profit for the monopolist?
d) If the monopolist were a revenue maximizer instead of a profit maximizer, what would be the output level to maximize revenue?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its
product:
Q = 200 - 2P MR = 100 - Q TC = 5Q MC = 5
a) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) suppose that a tax of $5 for each unit produced is imposed by
state government. What is the price...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 ; MR = 100-Q ; TC = 5Q ; MC = 5
a) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing level of
output?
b) Suppose that a tax of $5 for each unit produced is imposed by
state government. What is the profit maximizing...
A monopolist faces the following demand curve, marginal revenue, total cost curve and marginal cost curve...
A monopolist faces the following demand curve, marginal revenue,
total cost curve and marginal cost curve for its product: Q = 200 -
2P ; MR = 100 - Q ; TC = 5Q ; MC = 5
a) What level of output maximizes total revenue?. b) What is the
profit maximizing level of output?. c) What is the profit
maximizing price?. d) How much profit does the monopolist earn? e)
Suppose that a tax of $5 for each unit...
A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost...
A monopolist faces the following demand curve, marginal revenue
curve, total cost curve and marginal cost curve for its product: Q
= 200 - 2P MR = 100 - Q TC = 5Q MC = 5 a. What is the profit
maximizing level of output? (10 pts.) b. What is the profit
maximizing price? (8 pts.) c. How much profit does the monopolist
earn? (10 pts.)Immersive Reader (28 Points)
A profit-maximizing monopolist charges a price of $36. The intersection of the marginal revenue and marginal...
A profit-maximizing monopolist charges a price of $36. The
intersection of the marginal revenue and marginal cost curves
occurs where output is 20,000 units and marginal cost is $24.
Average total cost for 20,000 units of output is $32. As a result,
the monopolist’s profit is more than $80,000.
true or false
The continuous downward slope of the average total cost curve
suggests that the profit-maximizing natural monopolist is able to
exploit economies of scale to keep competitors from successfully...
Problem 1: A monopolist faces the following demand curve, marginal revenue curve, total cost curve and...
Problem 1: A monopolist faces the following demand curve,
marginal revenue curve, total cost curve and marginal cost curve
for its product: Market demand function: Q = 200 - 2P (direct form,
which shows Q as a function of P) Market demand function in the
indirect form: P = 100 – 0.5Q (indirect form because it shows P as
a function of Q). Marginal revenue function: MR = 100 – Q (Notice
that the slope of the MR function is...
Scenario A: A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its product:
Scenario A: A monopolist faces the following demand curve,
marginal revenue curve, total cost curve for its product:Q=3500-5pMR= 250-QTC=15QMC=100What level of output maximizes total revenue?What is the profit maximizing level of output?What is profit maximizing price?How much profit does the monopolist earn?Suppose that a tax of $10 for each unit produced is imposed by
state government. What is the profit maximizing level of
output.
A profit-maximizing monopolist operates with an inverse demand curve P = 20 − Q and an associated marginal revenue MR = 20 − 2Q.
A profit-maximizing monopolist operates with an inverse demand curve P = 20 − Q and an associated marginal revenue MR = 20 − 2Q. Marginal cost of production is constant at MC = 4. Assume they have to sell each unit of output for the same price.
a) Find the monopolist’s optimal choice of output and the socially efficient output.
b) Sketch demand, marginal revenue, and marginal cost. Indicate on your diagram the points you found in part a)....
a. If the marginal revenue is less than the marginal cost, what should a profit-maximizing company...
a. If the marginal revenue is less than the marginal cost, what
should a profit-maximizing company do?
b. In a perfectly competitive graph, how does one calculate the
economic profit?
c. What is the shutdown point in a perfectly competitive firm?
'
d. Briefly, what is the difference between economies of scale
and diseconomies of scale? Why is it important to the firm?
e. Given the following total cost function TC(q) = 1000 + 13q.
Find the fixed cost, variable...
why is the level of output at which marginal revenue equals marginal cost the profit maximizing...
why is the level of output at which marginal revenue equals
marginal cost the profit maximizing output?
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