Question
In: Economics
If a monopolist faces a linear demand curve, its marginal revenue curve will cross the quantity...
If a monopolist faces a linear demand curve, its marginal revenue curve will cross the quantity axis at the quantity related to:
a. MR=MC
b. the point of unit elasticity on demand curve
c. the minimum of average total cost
d. the profit maximizing price
Solutions
Expert Solution
Option B
When the monopoly has a liner demand curve then the MR CURVE will cut the quantity axis corresponding to the point where the demand curve is unitary elastic.
Rahul Sunny answered 2 years agoRelated Solutions
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)
Scenario A: A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its product:
Scenario A: A monopolist faces the following demand curve,
marginal revenue curve, total cost curve for its product:Q=3500-5pMR= 250-QTC=15QMC=100What level of output maximizes total revenue?What is the profit maximizing level of output?What is profit maximizing price?How much profit does the monopolist earn?Suppose that a tax of $10 for each unit produced is imposed by
state government. What is the profit maximizing level of
output.
Problem 1: A monopolist faces the following demand curve, marginal revenue curve, total cost curve and...
Problem 1: A monopolist faces the following demand curve,
marginal revenue curve, total cost curve and marginal cost curve
for its product: Market demand function: Q = 200 - 2P (direct form,
which shows Q as a function of P) Market demand function in the
indirect form: P = 100 – 0.5Q (indirect form because it shows P as
a function of Q). Marginal revenue function: MR = 100 – Q (Notice
that the slope of the MR function is...
4. A monopolist faces a linear demand for its product and has a flat marginal and...
4. A monopolist faces a linear demand for its product and has a
flat marginal and average cost of production. An innovation lowers
the cost of production by $1 per unit. Use the graph to show the
profit-maximizing monopolist’s choice and the changes due to the
innovations. a. How much will the price change as the result of the
innovation? b. How much will profit per unit change as the result
of the innovation? c. Summarize: who benefits from the...
- For a monopolist who faces a downward-sloping demand curve, marginal revenue is less than price whenever
TRUE OR FALSE. PROVIDE EXPLANATION.- For a monopolist who faces a downward-sloping demand curve,
marginal revenue is less than price wheneverquantity sold is positive.- Since a monopoly charges a price higher than marginal cost, it
will produce an inefficient amount of output- A monopolist will always equate marginal revenue and marginal
cost when maximizing profit- If s/he produces anything at all, a profit-maximizing
monopolist with some fixed costs and no variable costswill set price and output so as to maximize...
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.
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...
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