Suppose that a monopolist whose marginal cost curve is MC(Q)=Qfaces the demand curve P=10-2Q.

Suppose that a monopolist whose marginal cost curve is MC(Q)=Q faces the demand curve P=10-2Q. What is monopolist's profit-maximizing quantity, profit-maximizing price, the total surplus (under monopoly profit maximization), also called the "monopoly market surplus," and if the monopolist can perfectly price discriminate, then deadweight loss equals...?

Expert Solution

Rahul Sunny answered 2 years ago

5. A monopolist faces a demand curve P = 64−2Q. His marginal cost is MC =...

5. A monopolist faces a demand curve P = 64−2Q. His marginal cost is MC = 16. (a) Draw a graph to illustrate and calculate the profit maximizing output and price. (b) Calculate the efficient level of output and the DWL. (c) Suppose the government gave the monopolist a subsidy of $4 per unit produced. Compute the profit maximizing output level and the deadweight loss associated with this new output. Explain intuitively why the DWL has changed.

A monopolist has a marginal cost curve MC=Q and a home market demand P=30-Q. The monopolist...

A monopolist has a marginal cost curve MC=Q and a home market demand P=30-Q. The monopolist can also sell in a foreign market at a price pf Pf=12. Find and graph the quantity produced, quantity sold at home, and quantity sold in the foreign market, as well as the price charged at-home market. Explain why the monopolist's profits would fall if it were to produce the same quantity but sell more in the home market.

Suppose the demand and marginal cost equations for a monopolist are as follows: Q = 6600 – 2P MC = 2Q.

Suppose the demand and marginal cost equations for a monopolist are as follows: Q = 6600 – 2P MC = 2Q. a. Find the inverse demand equation and the marginal revenue equation. b. Find the profit maximizing quantity and price for this monopolist (remember to set MR = MC and solve for Q).

A monopolist with marginal cost of MC=Q faces a demand curve of QD = 20 -...

A monopolist with marginal cost of MC=Q faces a demand curve of QD = 20 - 2P. This implies that P = 10 - (1/2)Q and that the marginal revenue is MR = 10 - Q. a. Sketch demand, marginal revenue, and marginal cost curves. b. What quantity and price will the monopolist set? c. What quantity and price would the monopolist set if it produced at the efficient market outcome where P=MC? d. Identify the CS, PS and DWL...

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 has marginal costs MC = Q and home market demand P = 40 –Q...

A monopolist has marginal costs MC = Q and home market demand P = 40 –Q (that is the MR = 40 –2Q). The monopolist can also sell to a foreign market at a constant price P = 16. Find and graph the quantity produced, quantity sold in the home market, quantity sold in the foreign market, and price charged in the home market.Explain why the monopolist’s profits wouldfall if it were to produce the same quantity but sell more...

1. Demand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q What is the amount of profit...

1. Demand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q What is the amount of profit for this monopolist? 2. Demand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q For this monopolist, the profit-maximizing price is ________ and the profit-maximizing quantity is _________. 3. Demand: P=120-Q Total Cost: TC=Q2 Marginal Revenue: MR=120-2Q Marginal Cost: MC=2Q Compared to perfect competition where P=MC, what is the amount of deadweight loss caused by this monopolist _________.

Suppose a monopolist faces a market demand curve Q= 120 - 2p. a. If marginal cost...

Suppose a monopolist faces a market demand curve Q= 120 - 2p. a. If marginal cost is constant and equal to zero, what is the magnitude of the welfare loss? b. If marginal cost increases to MC= 10, does welfare loss increase or decrease? Use a graph to explain your answer.

A monopolist has marginal costs MC=Q and a home market demand P=30-Q. The monopolist can also...

A monopolist has marginal costs MC=Q and a home market demand P=30-Q. The monopolist can also sell to a foreign market at a constant price of Pf=12. Find and graph the quantity produced, quantity sold in the home market, quantity sold in the foreign market, and price charged in the home market. Explain why the monopolist's profits would fall if it were to produce the same quantity but sell more in the home market.

A monopolist has marginal costs MC = Q and home market demand P = 40 –...

A monopolist has marginal costs MC = Q and home market demand P = 40 – Q (that is the MR = 40 – 2Q). The monopolist can also sell to a foreign market at a constant price P = 16. Find and graph the quantity produced, quantity sold in the home market, quantity sold in the foreign market, and price charged in the home market. Explain why the monopolist’s profits would fall if it were to produce the same...

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