Question

In: Economics

A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function...

A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is PA =60−QA, and the Japanese inverse demand function is PJ =80−2QJ, where both prices, PA and PJ, are measured in dollars. The firm’s total cost of production is TC=5+16Q in both countries. Assume that the firm can prevent resale in other countries.

What price will it charge in the U.S.? ________

What is the optimal quantity in the U.S.? ________

What is the total cost producing the optimal quantity in the U.S.? ________

What is the maximum profit for the good in the U.S.? ________

What price will it charge in the Japanese markets? ________

What is the optimal quantity in the Japanese markets? ________

What is the total cost producing the optimal quantity in the Japanese markets? ________

What is the maximum profit for the good in the Japanese markets? ________

Now, resale is allowed in both markets. What is the optimal price in both markets (round to the nearest whole number? ________ What is the optimal quantity in both markets? ________

Expert Solution

What price will it charge in the U.S.? ___38_____

What is the optimal quantity in the U.S.? ___22_____

What is the total cost producing the optimal quantity in the U.S.? ____357____

What is the maximum profit for the good in the U.S.? ____479____

What price will it charge in the Japanese markets? ___48_____

What is the optimal quantity in the Japanese markets? ____16____

What is the total cost producing the optimal quantity in the Japanese markets? _____261___

What is the maximum profit for the good in the Japanese markets? __507______

Now, resale is allowed in both markets. What is the optimal price in both markets (round to the nearest whole number? ___41.34_____ What is the optimal quantity in both markets? ___38_____

Rahul Sunny answered 2 years ago

A monopoly sells good Q in two markets. The demands in these two markets are depicted...

A monopoly sells good Q in two markets. The demands in these two markets are depicted by the equations, ? = 10 − ? and ? = 18 − 3? . The goods for both markets are supplied from ##$$ the same factory with the marginal cost, $2. a. (5 points) What is the profit-maximizing price-quantity combination in each market? What is the total profit? Assume a consumer in one market does not have access to the other market, i.e.,...

A monopoly firm faces two markets where the inverse demand curves are &nbs

A monopoly firm faces two markets where the inverse demand curves are Market A: PA =140 − 2.75QA, Market B: PB = 120 − QB. The firm operates a single plant where total cost is C = 20Q+0.25Q^2, and marginal cost is m = 20 + 0.5Q. Suppose the firm sets a single price for both markets. Using the information above, the profit maximizing price is $86.18 and the profit maximizing quantity is 53.37 units. Given this information, you determine...

Consider a monopoly facing inverse demand function ?(?) = 12 − ?, where ? = ?1...

Consider a monopoly facing inverse demand function ?(?) = 12 − ?, where ? = ?1 + ?2 denotes the monopolist’s production across two plants, 1 and 2. Assume that total cost in plant 1 is given by ??1 (?1 ) = (5 + 4?1)?1, while that of plant 2 is ??2 (?2 ) = [5 + (4 + ?)?2]?2, where parameter ? ≥ 0 represents plant 2’s inefficiency to plant 1. When ? = 0, the total (and marginal)...

A monopoly has an inverse demand function given by p = 120 - Q and a...

A monopoly has an inverse demand function given by p = 120 - Q and a constant marginal cost of 10. a) Graph the demand, marginal revenue, and marginal cost curves. b) Calculate the deadweight loss and indicate the area of the deadweight loss on the graph. c) If this monopolist were to practice perfect price discrimination, what would be the quantity produced? d) Calculate consumer surplus, producer surplus, and deadweight loss for this monopolist under perfect price discrimination.

Focus on the difference between the U.S. and Japanese financial markets and how the Japanese markets...

Focus on the difference between the U.S. and Japanese financial markets and how the Japanese markets make high financial leverage more attainable than that possible for U.S. firms. Please provide some research and respond with accurate Citation and Reference.

4. Assume a monopoly faces an inverse demand function of p = 150 - 3Q, and...

4. Assume a monopoly faces an inverse demand function of p = 150 - 3Q, and has a constant marginal and average cost of 30. a. If the monopolist can perfectly discriminate, what is its profit, consumer surplus and total surplus, and what is the deadweight loss of monopoly? b. If the firm is a single-price monopolist, what is its profit, consumer surplus and total surplus, and what is the deadweight loss of monopoly?

The inverse demand function a monopoly faces is P = 100 − Q. The firm’s cost...

The inverse demand function a monopoly faces is P = 100 − Q. The firm’s cost curve isTC(Q) = 10 + 5Q.Suppose instead that the industry is perfectly competitive. The industry demand curve and firm cost function is same as given before. (j) (4 points) What is the level of output produced? Compare it to the output of single price monopoly. (k) (4 points) What is the equilibrium price for this industry? Compare it to the price charged of single...

1.) A monopolist sells its good in two markets denoted by N and S. The demand...

1.) A monopolist sells its good in two markets denoted by N and S. The demand for the good in market N is PN = 100 − QN. The demand for the good in market S is PS = 60 − QS. The marginal cost of producing the good is $20. For your calculations below assume zero fixed costs. a (15). Derive the monopolist’s two-part pricing scheme that allows 1st-degree price discrimination. Provide the fixed fee, the per-unit price, and...

Firm A sells a good and faces an inverse demand curve of P = 120 –...

Firm A sells a good and faces an inverse demand curve of P = 120 – Q, has constant marginal costs of 60 and no fixed costs (c) For each of the following four situations: (1) state whether you would expect quantities Qa and Qb to rise, stay the same or fall, and (2) provide a brief (two to three sentence maximum) explanation. Note: I’m not looking for nor expecting *any* calculation here. A brief explanation of how and why...

3. Assume that the inverse demand function for a good is P = 40 – 2Q....

3. Assume that the inverse demand function for a good is P = 40 – 2Q. A monopolist retailer has exclusive rights to sell this good. A monopolist manufacturer sells the good to the retailer at price R. The retailer has an additional marginal cost equal to $2 per unit. The manufacturer’s marginal cost is $4 per unit. a) Assume that the two firms remain independent. Determine the value of R charged by the manufacturer. b) Now assume that the...