Question

In: Economics

Answer True or False based on the following: suppose the demand curve for a monopolist is QD= 47,000 -50 P, and the marginal revenue function is MR= 940 -0.04Q

Answer True or False based on the following: suppose the demand curve for a monopolist is QD= 47,000 -50 P, and the marginal revenue function is MR= 940 -0.04Q. The monopolist's Marginal Cost = 40 + 0.02Q and its Total Cost =250,000 + 40Q +0.01Q2.

The monopolist's profit-maximizing output and price are 15,000 and $640, respectively. TRUE or FALSE

At the level of output and price determined in the previous question, this monopolist is making $6.5 million in economic profit. TRUE or FALSE

The Lerner Index for this industry at the monopolist's profit-maximizing output and price is 0.47 TRUE or FALSE

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Suppose the demand curve for a monopolist is QD = 47,000 - 50 P, and the...
Suppose the demand curve for a monopolist is QD = 47,000 - 50 P, and the marginal revenue function is MR = 940 - 0.04Q. The monopolist's Marginal Cost = 40 + 0.02Q and its Total Cost = 250,000 + 40Q + 0.01Q2. a. Find the monopolist's profit-maximizing output and price. b. calculate the monopolist's profit/losses, if any. c. What is the Lerner Index for this industry at the monopolist's profit-maximizing output and price
Given the demand curve for a monopolist: Qd= 60 -2 P and the marginal revenue curve:...
Given the demand curve for a monopolist: Qd= 60 -2 P and the marginal revenue curve: MR = 30 -Q. Marginal cost equals average cost at $14. What is the price and quantity that the profit-maximizing monopolist will produce? Graph these curves andlabel theequilibrium points. b) Ifthis were a competitive industry, what price and quantity would be produced? Show this on the above graphand show your work (answers) below. c) What is the monopolist's profit? What is the consumer surplus...
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 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 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)....
Suppose that the market demand is: P = 24 – 3Q, and marginal revenue is: MR...
Suppose that the market demand is: P = 24 – 3Q, and marginal revenue is: MR = 24 – 6Q. The marginal cost is: MC = 6 and fixed cost is 0. a. If the market structure is monopoly, determine the profit maximizing price and output for this monopolist and calculate its economic profit or loss at the profit maximizing output. b. If the market structure is perfect competition, determine the profit maximizing price and total output and calculate a...
A monopolist is facing the following demand curve P = 50 − 5Q. The monopolist has...
A monopolist is facing the following demand curve P = 50 − 5Q. The monopolist has the following marginal cost MC = 10. The monopolist knows exactly the willingness to pay of each individual consumer and charge consumers individual prices. Calculate the monopolist’s profit (assuming FC=0). (a) π=40 (b) π=80 (c) π = 160 (d) None of the above.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT