Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves.

Assignment: Draw a graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). (Photos of your work are not accepted) Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. What happens to the firm’s profits? Does price discrimination lead to a more efficient or less efficient outcome? Why or why not?

Expert Solution

Rahul Sunny answered 2 years ago

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the...

Draw the graph for a monopoly with demand, marginal revenue, and marginal cost curves. Identify the profit-maximizing output level (Qm) and price (Pm). Suppose the monopolist sells Qm units of output at the regular price and then puts the product on sale at a lower price, Ps. Show the new price and quantity. Identify the consumer surplus of the additional sales. What happens to the firm’s profits and Does price discrimination lead to a more efficient or less efficient outcome?...

14. Consider a monopoly facing the following demand, marginal revenue, total cost, and marginal cost curves:...

14. Consider a monopoly facing the following demand, marginal revenue, total cost, and marginal cost curves: Demand curve: P = 12 – 0.002 Q Marginal revenue curve: MR = 12 – 0.004 Q Total cost curve: TC = 3Q +0.0005Q2 Marginal cost curve: MC = 3 + 0.001 Q a. Calculate the profit maximizing output of this monopoly. Briefly explain your answer. b. What is the socially efficient output level? Briefly explain your answer. c. Suppose the government wants to...

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal...

Draw the graph of a profit maximizing monopoly. Be sure to include demand, marginal cost, marginal revenue, the price the monopoly charges and the quantity it sells. Indicate where on this graph the socially efficient production and price would be. Indicate on this graph the deadweight loss. Why is there deadweight loss in a monopoly?

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average...

A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average revenue for a perfectly competitive firm. Indicate the level of profit where profit is maximized, shade in the area of maximum profit, give the amount of maximum profit, and explain how this number is calculated. B.Graph the short-run supply curve for a perfectly competitive firm and explain where this short-run supply curve lies. Indicate the following curves on your graph: marginal cost curve, marginal...

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total...

In using the graph for a monopolist, with demand, marginal revenue, marginal cost, and average total cost curves, explain how you find the profit maximizing level of output. (Note that this question asks about OUTPUT. The next question asks about PRICE.) Profits are maximized at the quatnity where total revenue is highest above total cost Profits are maximized at the quantity where ATC hits its minimum Profits are maximized at the quantity where marginal revenue equals marginal cost Profits are...

Using the Google Draw tool, create a marginal revenue and demand for a monopolist graph. Then...

Using the Google Draw tool, create a marginal revenue and demand for a monopolist graph. Then answer the following questions: What is the relationship between Marginal Revenue (MR), and Demand (D) for a monopolist? For a non-price discriminating monopolist (a monopolist who charges only one price), if the cost for producing one extra unit of a product where $0, what point on your curve should the monopolist produce? (Hint: think Marginal Benefit/Revenue = Marginal Cost or MB=MC) Make sure to...

2 a.) Draw the demand, marginal revenue and marginal cost curve for a monopolist. Show the...

2 a.) Draw the demand, marginal revenue and marginal cost curve for a monopolist. Show the equilibrium price and quantity supplied and total profit. Show the equilibrium price and quantity supplied and total profit. b.) Suppose new policy suggest the government can imposed a tax on monopolists equal to 25 percent of their economic profits, how this affect the output level of the firm? How about the price? Explain.

Suppose that a monopoly faces the demand, marginal revenue, and cost schedules below. Quantity Price Marginal...

Suppose that a monopoly faces the demand, marginal revenue, and cost schedules below. Quantity Price Marginal Revenue Marginal Cost Average Total Cost 1 230 230 100 150 2 210 190 100 125 3 190 150 100 116.6666667 4 170 110 100 112.5 5 150 70 100 110 6 130 30 100 108.3333333 7 110 -10 100 107.1428571 8 90 -50 100 106.25 9 70 -90 100 105.5555556 10 50 -130 100 105 What quantity maximizes profit? The monopoly Q =...

The graph below shows a particular firm's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves

The graph below shows a particular firm's marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves, where the market is competitive. Suppose that a new management team is brought in and that this team is initially less concerned about maximizing profits than it is simply about making a profit. What range of production quantities will allow the firm to operate while earning a profit?Give your answer by dragging the Qmin to Qmax lines into their correct positions. The output will...

Question 2 2.1. Using average and marginal cost curves and average and marginal revenue curves show...

Question 2 2.1. Using average and marginal cost curves and average and marginal revenue curves show a firm in a perfectly competitive market in short run making and maximising its profit. (Draw a diagram and explain it.) 2.2. Using average and marginal cost curves show a firm in a monopolistically competitive market making a loss whilst simultaneously behaving rationally in the short run. (Draw a diagram and explain it.) 2.3. Explain the Prisoner’s Dilemma. (You can use a pay-off matrix...

Question