A monopoly firm has the following demand and cost structure in the short run: Q P...

A monopoly firm has the following demand and cost structure in the short run:

Q	P	TFC	TVC	TC	MC	TR	MR	Profit/Loss
0	100	100	0
1	90		50
2	80		90
3	70		150
4	60		230
5	50		330
6	40		450
7	30		590

Complete the table.
What is the best profit or loss available to this firm?

Should the firm operate or shut down in the short run? Why?

What is the relationship between MR and MC as the firm increases output?

Solutions

Expert Solution

Rahul Sunny answered 5 months ago

Next > < Previous

Related Solutions

Consider a monopoly that faces a demand curve and short run total cost function of: P=...

Consider a monopoly that faces a demand curve and short run total cost function of: P= 270-2Q TC= 4700+1/4Q2 A. Find the profit-maximizing quantity for this monopolist. B. How much profit will the firm make? C. Represent this situation graphically, pointing out all the features, including cost curves. D. How much is the deadweight loss caused by the monopolist?

Consider a monopoly firm facing a demand curve Q = 100 – P. This firm has...

Consider a monopoly firm facing a demand curve Q = 100 – P. This firm has fixed costs =$1000 and constant marginal cost =$20. Total costs are $1000 + $20Q and average costs are $1000/Q + $20. a. What is the firm’s profit maximizing level of output? What price does it charge to sell this amount of output? How much profit does it make? What is consumer surplus at this level of output? Show your work.(8) b. Suppose this firm...

Suppose a profit-maximizing monopoly firm has short-run total cost function TC(Q)=5Q+300. It faces market demand Q=400-4P....

Suppose a profit-maximizing monopoly firm has short-run total cost function TC(Q)=5Q+300. It faces market demand Q=400-4P. What price will it charge and what quantity will it sell if it acts as a one-price monopolist? If the firm wishes to sell output in two different blocks at different prices, what are the prices it will charge and how much will it sell in each block?

x A monopoly faces the demand curve P = 110 — Q and has the cost...

x A monopoly faces the demand curve P = 110 — Q and has the cost function C (Q) = 10Q + Q2. Compare the total Q, profits, producer surplus, consumer surplus and DWL compared to perfect competition for: a. single-price monopoly, b. the perfectly price-discriminating monopoly, c. and a quantity-discriminating monopoly (block pricing) by considering one possible price schedule: sell its first 25 units (Q1) at P1 = 85 and sell an additional (Q2 — Q1) = —235 units...

12. Suppose a monopoly firm faces the market demand Q = 500 – p and has...

12. Suppose a monopoly firm faces the market demand Q = 500 – p and has cost function C = 100 + Q2 . Find the firm’s profit, CS, PS, and DWL for the following scenarios: a. The monopoly firm charges a single price b. The monopoly firm perfectly price discriminate c. The monopoly firm adopts a block-pricing schedule with 2 quantity blocks

Monopoly: Consider a monopoly firm facing a demand curve Q = 100– P. The marginal...

Monopoly: Consider a monopoly firm facing a demand curve Q = 100 – P. The marginal revenue curve is therefore MR= 100 – 2Q. This firm has fixed costs =$1000 and constant marginal cost =$20. Total costs are $1000 + $20Q and average costs are $1000/Q + $20. a. What is the firm’s profit maximizing level of output? What price does it charge to sell this amount of output? How much profit does it make? Show your work. b. Suppose...

Question : A monopoly market structure firm is facing the following demand curve Q = 1800...

Question : A monopoly market structure firm is facing the following demand curve Q = 1800 - 25P. Its short-run total cost is given by :100+7Q+0.025Q2. Find the following for this firm: a. His profit maximizing quantity, price and TR? b. If this firm want to incur an average selling cost of Rs 33 per unit will the firm face below, above or just normal profits?

A monopoly faces market demand Q = 30−P and has a cost function C(Q) = Q^2...

A monopoly faces market demand Q = 30−P and has a cost function C(Q) = Q^2 (a) Find the profit maximizing price and quantity and the resulting profit to the monopoly. (b) What is the socially optimal price? Calculate the deadweight loss (DWL) due to the monopolist behavior of this firm. Calculate consumer surplus (CS) and producer surplus (PS) given the profit maximizing price. (c) Assume that the government puts a price ceiling on the monopolist at P =22. How...

A. A competitive firm has a short run total cost curve represented by the following equation:C(q)...

A. A competitive firm has a short run total cost curve represented by the following equation:C(q) = q2/4 + 50 a. (4) Derive how many units a profit maximizing competitive firm produce as a function of P(price)(qs(p)=). b. (2) If there are 100 firms in the market, derive the supply curve. c. (6) The market demand is 1200 –100P derive the market price and the firm’s profit. d.(2)Given your answer in c, explain what will start to happen in the...

A competitive firm has the following short run cost function T C = Q 3 −...

A competitive firm has the following short run cost function T C = Q 3 − 8Q 2 + 30Q + 5 . (a) Find marginal cost, average cost, and average variable cost and sketch them on a graph. (b) At what range of prices will the firm supply zero output, i.e. shutdown? (c) Identify the firms supply curve (d) At what price would the firm supply exactly 6 units of output? (e) Compute the price elasticity of supply at...

Subjects