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? ________

Solutions

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 1 year ago

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