II. Consider a monopolist where the market demand curve for the produce is given by P...

II. Consider a monopolist where the market demand curve for the produce is given by P = 520 – 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.

a. Given the above information, what is this monopolist’s profit maximizing price and output if it charges a single price?

b. Given the above information, calculate this single price monopolist’s profit.

c. At the profit maximizing quantity, what is this monopolist’s average total cost of production (ATC)?

d. At the profit maximizing quantity, what is the profit per unit for this single price monopolist?

Expert Solution

Rahul Sunny answered 2 years ago

Consider a Monopolist where the inverse market demand curve for the produce is given by P...

Consider a Monopolist where the inverse market demand curve for the produce is given by P = 520 − 2Q. Marginal Cost: MC =100 + 2Q and Total Cost: 100 .50 2 TC = Q + Q + [1 + 1 + 1 = 3] Calculate: (a) Profit Maximizing Price and Quantity. (b) Single Price Monopolist Profit. (c) At the profit maximizing quantity, what is the Average Total Cost (ATC) for the Consider a Monopolist where the inverse market demand...

A profit-maximizing monopolist operates in market with an inverse demand curve given by P = 20...

A profit-maximizing monopolist operates in market with an inverse demand curve given by P = 20 − Q and an associated marginal revenue MR = 20 − 2Q. Their marginal cost of production is constant at MC = 4. Assume for now that 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...

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...

A monopolist faces a demand curve of Q = 164 – P, where P is price...

A monopolist faces a demand curve of Q = 164 – P, where P is price and Q is the output produced by the monopolist. What choice of output will maximize revenue? Group of answer choices 70 74 82 86 if monopolist produces good X and faces a demand curve X = 112 - 2P, where P is price. What is the monopolist's marginal revenue as a function of good X? Group of answer choices 44 - X 56 -...

2. The inverse demand curve of a monopolist is given by: P = 200 −...

2. The inverse demand curve of a monopolist is given by: P = 200 − Q and the marginal cost is constant at $10, how does charging the monopoly a specific tax of τ=$12 per unit affect the monopoly optimum and the welfare of consumers, the monopoly, and society (where society's welfare includes the tax revenue)? Calculate the following: equilibrium price and quantity before the tax equilibrium price and quantity after the tax the change in consumer surplus the...

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.)

#1) Consider a market with demand curve given by P = 90 - Q . The...

#1) Consider a market with demand curve given by P = 90 - Q . The total cost of production for one firm is given by TC(q) = (q2/2)+10 . The marginal cost of production is MC = q . a) If the market is perfectly competitive, find the supply curve for one firm. Explain. b) If the market price was $10, how many perfectly competitive firms are in the industry if they are identical? Explain. c) Find an expression...

consider a monopolist. Suppose the monopolist faces the following demand curve: P = 140 – 6Q....

consider a monopolist. Suppose the monopolist faces the following demand curve: P = 140 – 6Q. Marginal cost of production is constant and equal to $20, and there are no fixed costs. What is the monopolist’s profit maximizing level of output? What is the value of the deadweight loss created by this monopoly?

A monopolist faces a demand curve P= 11 – Q, where P is measured in dollars...

A monopolist faces a demand curve P= 11 – Q, where P is measured in dollars per unit and Q in thousands of units. The monopolist has a constant average cost of $6 per unit. a. Draw the average and marginal revenue curves and the average and marginal cost curves. What are the monopolist’s profits-maximizing price and quantity? What is the resulting profit? Calculate the firm’s degree of market power using the lerner index. b. A government regulatory agency sets...

A monopolist has a demand curve given by P = 120 - Q and a total...

A monopolist has a demand curve given by P = 120 - Q and a total cost curve given by TC = 50 +2Q2. The associated marginal cost curve is MC = 4Q. Suppose the monopolist also has access to a foreign market in which he can sell whatever quantity he chooses at a constant price of 88. How much will he sell in the foreign market? What will his new quantity and price be in the original market?

Question