Suppose a first degree price discriminating monopolist has an inverse demand curve of P=100-2Q and a...

Suppose a first degree price discriminating monopolist has an inverse demand curve of P=100-2Q and a marginal cost curve of MC=10+4Q. Assume fixed costs are zero. What is the firm's maximum profit?

Expert Solution

Rahul Sunny answered 2 years ago

The inverse demand curve a monopoly faces is p = 100 - 2Q The firm's cost...

The inverse demand curve a monopoly faces is p = 100 - 2Q The firm's cost curve is C (Q) = 20 + 6Q What is the profit-maximizing solution? The profit-maximizing quantity is _______. (Round your answer to two decimal places.) The profit-maximizing price is $________. (Round your answer to two decimal places.) What is the firm's economic profit? The firm earns a profit of $________. (Round your answer to two decimal places.) How does your answer change if C(Q)...

Suppose that the industry demand curve is given by P = 120 – 2Q. The monopolist/incumbent...

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2. Suppose a firm faces an inverse demand curve P = 6 − 1/2Q and has...

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Suppose the demand curve in a city is given by P = 100 - 2Q, where...

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Suppose that the retail market for widgets has inverse demand curve P = 100 – Q. Widget retailing is controlled by a monopoly retailer, R Inc., which obtains its widgets from the monopoly wholesaler W Inc. at a wholesale price of w per widget. In addition R Inc. incurs a cost of $2 per widget to promote the product and sell to consumers. Wholesaler W Inc. obtains the widgets in from monopoly manufacturer M Ltd. at a manufacturing price of...

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...

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...?

A profit-maximizing monopolist operates with an inverse demand curve P = 20 − Q and an associated marginal revenue MR = 20 − 2Q.

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Monopoly with linear inverse demand. Consider a monopolist facing a linear inverse demand curve p(q)= a- bq, and cost function C(q)= F + cq, where F denotes its fixed costs and c represents the monopolist's (constant) magical cost a>c 1. Graph demand, marginal revenue and marginal cost. Label your graph carefully, including intercepts 2. Solve the profit maximizing output q^m. To do this, first write down the expression for MR=MC and solve for the optimal quantity. Next find the price...

Suppose a monopolist facing a downward sloping inverse demand curve p(q) sets prices and quantity (p...

Suppose a monopolist facing a downward sloping inverse demand curve p(q) sets prices and quantity (p ∗ , q∗ ). Show that the area between the demand curve and the marginal revenue curve equals the consumer surplus.

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