Question

In: Economics

Suppose that a price-searcher monopolist had a total cost function given by: TC= 20 + 0.5Q...

Suppose that a price-searcher monopolist had a total cost function given by: TC= 20 + 0.5Q +0.2Q2. The demand for the price searcher's product is given by: QD= 100 -20P. Calculate the monopolist's producer surplus.

Expert Solution

The marginal cost would be or or . The inverse demand would be . The total revenue would be or or . The marginal revenue would be or or .

The profit maximizing output would be where the MC is equal to the MR, ie or or or . The corresponding price would be .

The PS would be the total revenue of the firm minus the area below the marginal cost curve (the variable cost). The total revenue of the firm would be dollars. The area below the marginal cost curve would be or or or or or dollars. The producer surplus would hence be dollars.

The graph is as below.

Rahul Sunny answered 2 years ago

A monopolist faces the demand function Q = 20 – 2P. Its cost function is TC(Q)...

A monopolist faces the demand function Q = 20 – 2P. Its cost function is TC(Q) =0.5Q. Solve for the monopolist’s profit-maximizing price and output and calculate its profit as well as the consumer surplus and deadweight loss.

If a representative firm with the total cost given by TC = 20 + 20q +...

If a representative firm with the total cost given by TC = 20 + 20q + 5q2 operates in a competitive industry where the short-run market demand and supply curves are given by ??=1,400−40? and ??=−400+20?, the number of firms operating in the short run will be: a. 140 b. 200 c. 280 d. 100

Consider a monopolist whose total cost function is TC = Q3 – 30Q2 + 301Q, whose...

Consider a monopolist whose total cost function is TC = Q3 – 30Q2 + 301Q, whose inverse demand function is P = 1501 – 30Q where Q is output and P is the price. If the firm were to act as a single price monopolist, how much will it produce? What price it will charge? How large will be its profit? Calculate the firm’s Lerner Index of monopoly power. Now suppose this firm can practice perfect price discrimination. How much...

Suppose a firm has the following total cost function TC = 200+2q2 . If price equals...

Suppose a firm has the following total cost function TC = 200+2q2 . If price equals $30, what is the firms’ profit maximizing output? What are its short-run profits?

A monopolist has a demand curve given by P = 92 - 8Q and a total cost curve given by TC = 60Q.

A monopolist has a demand curve given by P = 92 - 8Q and a total cost curve given by TC = 60Q. The associated marginal cost curve is MC = 60. What is the monopolist's marginal revenue curve? MR = 70 - 8Q MR = 92 - 16Q MR = 70 - 8Q MR = 56 - Q none of the above And what is the monopolist's profit maximizing quantity? 2 6 18 9 none of the...

Suppose a perfectly competitive firm's short-run total cost (TC) is given by TC = 200...

Suppose a perfectly competitive firm's short-run total cost (TC) is given by TC = 200 + 4Q + 2Q2 where Q = output and 200 = fixed cost. As a result, MC = 4 + 4Q. Suppose the price of the firm's price is $24. a. How much should the firm produce in the short run to maximize its profits? b. How large will the firm's short-run profits be? Remember Profit = TR – TC. c. Should the...

Assume that a competitive firm has the total cost function: TC=1q3−40q2+720q+2000 Suppose the price of the...

Assume that a competitive firm has the total cost function: TC=1q3−40q2+720q+2000 Suppose the price of the firm's output (sold in integer units) is $700 per unit. Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level? Please specify your answer as an integer.

Assume that a competitive firm has the total cost function: TC=1q3−40q2+890q+1800 Suppose the price of the...

Assume that a competitive firm has the total cost function: TC=1q3−40q2+890q+1800 Suppose the price of the firm's output (sold in integer units) is $600 per unit. Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level? Please specify your answer as an integer. STUDENT NOTE: I already know the answer, but can you help me with how to calculate the numbers under Total Cost. I know where 2651 comes from but...

A firm’s total cost function is given by TC = 3Q^2 + 48. What are the...

A firm’s total cost function is given by TC = 3Q^2 + 48. What are the firm’s fixed cost, variable cost, average fixed cost, average variable cost, and marginal cost functions? Provide a thorough and detailed sketch of the MC, AFC, AVC curves, as well as the average total cost (AC) curve, all in one graph. Find the point where AC is the lowest, show it in the graph.

Suppose we have a monopolist that faces an inverse demand function and total cost function of...

Suppose we have a monopolist that faces an inverse demand function and total cost function of Pd= 200−2Qd C(Qs)=Qs^2 + 8Qs + 50 Note that the last part of this question asks you to graph much of your answers to the first parts of this question. (a) Find the profit maximizing level of output (Q) and the corresponding price charged (P). (b) Find the Socially optimal level of output and price. (hint: this is the case when we assume perfect...