1. Profit maximization and loss minimizationLagatt Green is a monopoly beer producer and distributor operating in the hypothetical economy of Lightington. Assume that Lagatt Green is not ableprice discriminate, and so it sells its beer to all customers at the same price per bottle. The following graph gives the marginal cost (MC), marginalrevenue (MR), average total cost (ATC), and demand (D) curves that Lagatt Green faces for beer in Lightington.Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for Lagatt Green. If Lagatt Green is making aprofit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if Lagatt Green is suffering a loss,use the purple rectangle (diamond symbols) to shade in the area representing its loss.4.003.002.50ATC2.00X1.501.00MC0.00MR0PRICE (Dollars per unPrice(Dollars per bottle)2.002.25Given the earlier information, Jabrill4.003.503.0002.50Suppose Lagatt Green charges $2.00 per bottle. Your study partner Jabrill says that because Lagatt Green is a monopoly with market power, it shouldcharge the higher price of $2.25 per bottle in order to increase its profit.1.501.000.500.51.0 1.5 2.02.5 3.0 3.5QUANTITY (Thousands of bottles of beer)0MC0DSuppose that a technological innovation decreases Lagatt Green's costs so that it now faces the marginal cost (MC) and average total cost (ATC) givenon the following graph. Specifically, the technological innovation causes a decrease in average fixed costs, thereby lowering the ATC curve and movingthe MC curve.Quantity Demanded Total Revenue(Cans)(Dollars)Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity for Lagatt Green. If Lagatt Green ismaking a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if Lagatt Green is sufferinga loss, use the purple rectangle (diamond symbols) to shade in the area representing the loss.(?)ATC40MR+DMonopoly Outcome0.5 1.0 15 20 25 3.0 3.5QUANTITY (Thousands of bottles of beer)ProfitLoss4.0Total Cost(Dollars)correct in his assertion that Lagatt Green should charge $2.25 per bottle.(?)+Monopoly OutcomeProfit(Dollars)ProfitLoss

Given :BYOB charges $2 per canDarnell charges $2.25 per can

1. Profit maximization and loss minimization Lagatt Green is a monopoly beer producer and distributor operating in the hypothetical economy of Lightington. Assume that Lagatt Green is not able price discriminate, and so it sells its beer to all customers at the same price per bottle. The following graph gives the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) curves that Lagatt Green faces for beer in Lightington. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for Lagatt Green. If Lagatt Green is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if Lagatt Green is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 1.50 3.00 250 Monopoly Outcome Prof

1. Profit maximization and loss minimization Lagatt Green is a monopoly beer producer and distributor operating in the hypothetical economy of Lightington. Assume that Lagatt Green is not able price discriminate, and so it sells its beer to all customers at the same price per bottle. The following graph gives the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) curves that Lagatt Green faces for beer in Lightington. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for Lagatt Green. If Lagatt Green is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if Lagatt Green is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. 4.00 1.50 3.00 250 Monopoly Outcome Prof

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Check my work Problem 11-05 (algo) You are the manager of a monopoly. Your analytics department estimates that a typical consumer's inverse demand function for your firm's product is P=150-40Q, and your cost function is q) = 70Q a. Determine the optimal two-part pricing strategy. Per-unit fee: $ Fixed fee: $ b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group 1’s elasticity of demand is −6, while group 2’s is −2. Your marginal cost of producing the product is $80. a. Determine your optimal markups and prices under third-degree price discrimination. markup for group 1: price for group 1: markup for group 2: price for group 2:
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Can I have the written solution? Thank you!
MONOPOLISTIC COMPETITION 1. Suppose that the cost of production is given by the following function: CT = 100 + Q2 and that the demand is given by P = 80 - Q. a. Determine the level of maximization.b. Determine the value of CT and ITc. Check that the IMg = CMg CT (Total cost) IMg (marginal income) CMg (marginal cost) Algebraically if the demand curve in the monopoly is a function of quantity, the demand curve is a straight line. P = a - bQWhere a is the ordinate to the origin, b the slope and Q the quantitySo if IT = P x QWe have that (a - bQ) Q = aQ - bQ2IT = aQ - bQ2And therefore the marginal income is the derivative of IT or what is equal to the variation of total income between the variation of the quantity.Therefore the IMg = derive the quantity in the function aQ - bQ2IMg = a - 2bQ Consider these functions when conducting monopoly exercises.
8. Natural monopoly analysis The following graph gives the demand (D) curve for water services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local water company, a natural monopolist. On the following graph, use the black point (plus symbol) to indicate the profit-maximizing price and quantity for this natural monopolist. ? PRICE (Dollars per hundred cubic feet) 40 36 32 28 24 20 16 12 8 0 0 1 MR 2 8 3 4 5 6 7 QUANTITY (Hundreds of cubic feet) ATC True MC False 9 10 The water company must own a scarce resource. D Which of the following statements are true about this natural monopoly? Check all that apply. The water company is experiencing economies of scale. The water company is experiencing diseconomies of scale. + In order for a monopoly to exist in this case, the government must have intervened and created it. Monopoly Outcome True or False: Without…
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Please solve the last two parts which is D and E, the first three sub parts has already been solved
1) With monopoly, we only specify long run cost functions because we are not as interested in the shut down decision and we don't have firm entry to compete away profit. Still, to make the math work, our monopolist cost functions often have fixed costs. Let's solve the following question: EagleSOFT has developed a computer program that will send UNT sports teams scores directly to purchaser's phones as text messages. Demand and total cost for the software company is described by the following equations: Demand: P = 70 -0.05Q, Cost: C = 4000 + - 10Q. a) What is the firm's level of output, the price they should charge, and their profit? b) What is the demand elasticity and Lerner index at the level of output?
Now pretend Mincer’s has a monopoly on UConn shirts. Draw a graph where Mincer’s is originally making 0 economic profits (D=ATC at profit-maximizing quantity), and then this shift in tastes occurs. Draw the box that represents the new profits/losses in this market, or explain why they will still make 0 profit.
I know that profit maximization for both a competitive and monopolistic market is MC=MR, however MR=P is applicable only in a competitive market and this is a monopoly. How do I solve this?
3. A monopolist who is the exclusive producer of cricket bats in the UK faces a demand curve defined by P = 100 – 2Q and a short-run total cost curve of TC = 300 + 20Q. a. Given the above information, compute total revenue, marginal revenue, and marginal cost for this producer, and identify the optimal quantity, the optimal profit, and the equilibrium price. [10 marks] b. Considering the information from your answer to bullet point a., represent the monopoly market structure graphically. [5 marks]