One big international bakery group has bought all the existing individual bakery stores and formed a...

One big international bakery group has bought all the existing individual bakery stores and formed a monopoly. The market demand remains the same and the marginal revenue of the monopoly is MR = 25-5Q. This monopoly re-allocates all the production resources, and finally its total cost becomes TC=3Q2 -8Q+9 and its marginal cost is MC= 6Q-8, where Q is in millions of units. What will be the selling price and profit for this monopoly? Illustrate the profit-maximizing price and quantity in a diagram.

Solutions

Expert Solution

For Monopoly, at eqm

MR = MC

25-5Q = 6Q-8

33 = 11Q

Qm = 3

Pm = 25 - 2.5Q

= 25-2.5*3

= $ 17.5

( As demand Curve have Slope, half to that of the MR curve )

so Demand Curve: P = 25 - (5/2)Q )

profit = TR - TC

= 3*17.5 - ( 3*9 -8*3 +9)

= 52.5 - 27 +24 -9

= $ 40.5

graph

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

a bakery has bought 140 lbs of muffin dough. They want to make muffins and waffles...

a bakery has bought 140 lbs of muffin dough. They want to make muffins and waffles in half dozen packs out of it. A pack of muffins requires one pound of dough & a pack of waffles requires half a pound of dough. It takes bakers 2 minutes to make a half dozen of muffins & 5 minutes to make a half dozen of waffles. The bakery make $1.50 profit on each pack of muffins and $2.00 profit on each...

Case study The Bigga Izbetta retail group has 4 department stores, all located in New Zealand,...

Case study The Bigga Izbetta retail group has 4 department stores, all located in New Zealand, at Invercargill, Dunedin and on the Kaikoura and Akaroa Coasts. It is a family-owned company run along traditional lines. Employees work under a hierarchical system, transfers and promotions are regulated by a seniority system, everyone works to a detailed job description and employees are paid according to a fixed salary schedule. George’s recent appointment as the head of the menswear department at the Kaikoura...

All formed elements in blood are derived from hematopoietic stem cells. If an individual lacked hematopoietic...

All formed elements in blood are derived from hematopoietic stem cells. If an individual lacked hematopoietic growth factors that allowed for the differentiation of myeloid stem cells into megakaryoblasts, what loss of function will that individual experience? Will introduction of thrombopoietin into the system resolve this individual’s condition? Why or why not?

1.Direct substitution of an existing group can be done by (choose all that apply)? Multiple answers:...

1.Direct substitution of an existing group can be done by (choose all that apply)? Multiple answers: You can select more than one option A.using a diazonium B.doing an ipso substitution C.treating benzene with a nucleophile D.treating halobenzene with a base E.catalytic hydrogenation

SMEs (all industries) are very proactive in developing business with international counterparts, whether they are individual...

SMEs (all industries) are very proactive in developing business with international counterparts, whether they are individual or corporates. Examine whether there are there any rules and regulations on cyber security AND data privacy that they need to comply with, and briefly explain each case.

International law governs the behavior of: Group of answer choices Individuals within a country All of...

International law governs the behavior of: Group of answer choices Individuals within a country All of the above Individuals globally Governments

Competency VI.7 A new pediatric group, Elmhurst Pediatric Group, has been formed and you have been...

Competency VI.7 A new pediatric group, Elmhurst Pediatric Group, has been formed and you have been chosen as information technology (IT) manager. A local hospital has reached out to the group offering participation in their electronic health record (EHR). The proposal states that the pediatric group will pay 15 percent of the hospital's costs related to the services. This seems like a good arrangement since investing in an EHR independently will require a significant capital expenditure. You Speak with the...

Nora has some questions for you regarding her individual tax return and C-C Bakery. Her business...

Nora has some questions for you regarding her individual tax return and C-C Bakery. Her business has been doing extremely well, and she has decided to give back to her community. She would like to contribute $70,000 in December of 2016 to the charitable and nonprofit Boys and Girls Club. She would like to know if she should contribute this from her business account or her individual account. She would also like to know if there are any tax advantages...

27.Your uncle has a big proportion of his life savings deposited in one of the Big...

27.Your uncle has a big proportion of his life savings deposited in one of the Big Four Australian banks. He read in the newspaper that due to COVID-19, these banks’ profitability has declined significantly as a result of some customers not being able to service their loans and negative economic outlook. He is worried that his deposit in the bank may not be secure and is wondering whether he should withdraw all his deposit from the bank. Knowing that you...

The International Olympic Committee (IOC) has formed a panel to discuss current issues with gender identity...

The International Olympic Committee (IOC) has formed a panel to discuss current issues with gender identity in professional athletics. As an expert in the field of sexual and gender identity you have been asked to provide an overview of the difference between gender identity and sexual identity, providing a clear explanation of how the two are formed, shapedand related. The IOC has also asked that you make a recommendation about how these athletes should be treatedin manner that is respectful...

Subjects