1. Suppose demand curve is: Q = 500 -20P. a. What is the monopoly output if marginal cost is 5? b. What is the Bertrand output if the marginal cost is 5 for both fims?
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![1. Suppose demand curve is: Q = 500 -20P.
a. What is the monopoly output if marginal cost is 5?
b. What is the Bertrand output if the marginal cost is 5 for both firms?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2905abed-971d-4303-aded-4d165c1d867e%2F3df9fef5-4ec3-466c-b251-b52807c30e67%2F1c3wdw8_processed.jpeg&w=3840&q=75)
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- Şuppose a monopoly has output and cost data as follow: Q P TC Quantity $ 00 60 60 1 58 100 2 57 136 3 56 168 4 55 200 5 54 235 6. 53 276 7 52 322 8. 51 372 9. 50 429 10 49 490 1. Determine the price and the quantity that maximize profit, how much is the profit? 2. Determine the MC, AVC, and ATC when Q=10 3. What is the perfect competition equilibrium P&Q 4. Show your answer graphically.A drug company introduces a drug which is protected by a patent. Therefore,it is a monopoly in that specific market. Suppose that inverse demand for the drug isgiven by P(y) = 100 − y/2. And cost function is C(y) = y2 + 10y + 100.a. What is the profit maximizing output and price?b. Calculate the profit, consumer’s surplus, producer’s surplus and thedeadweight loss.Suppose that the patent expires and the market becomes perfectly competitive.c. Find the profit maximizing output and price. And compare your answer with(a).d. Calculate the profit, consumer’s surplus, producer’s surplus and thedeadweight loss. And compare your answer with (b).Monopoly firm a. When a best-selling book was first released in paperback, the Hercules Bookstore chain seized a profit opportunity by setting a selling price of $9 per book (well above Hercules’ $5 average cost per book). With paperback demand given by P = 15 - .5Q, the chain enjoyed sales of Q =12 thousand books per week. (Note: Q is measured in thousands of books.) Draw the demand curve and compute the bookstore’s profit and the total consumer surplus. b. For the first time, Hercules has begun selling books online—in response to competition from other online sellers and in its quest for new profit sources. The average cost per book sold online is only $4. As part of its online selling strategy, it sends weekly e-mails to preferred customers announcing which books are new in paperback. For this segment, it sets an average price (including shipping) of $12. According to the demand curve in part (a), only the highest value consumers (whose willingness to pay is $12 or more)…
- Draw an example of a monopoly with a linear demand curve and a constant marginal cost curve. a. Show the profit-maximizing price and output and and identify the areas of consumer surplus, producer surplus, and deadweight loss. Also show the quantity that would be produced if the monopoly were to act like a price taker. b. Now suppose that the demand curve is a smooth concave-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the point Explain why the monopoly equilibrium will be the same as with the linear demand curve. Show how much output the firm would produce if it acted like a price taker. Show how the welfare areas change. c. Repeat the exercises in part b if the demand curve is a smooth convex-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the pointa. What is the Marginal Revenue function in this market? b. If there was only one coffee firm in this market, solve for the monopoly equilibrium price and quantity.Firm P has a monopoly on producing printers, and Firm C has a monopoly on producing computers. Printers and computers are complements, and Q is the number of bundles, with one printer and one computer in each bundle. Pp is the price of a printer, and Pc is the price of a computer. The demand function is Q = 10 – Pp – Pc, and marginal cost is zero. he two firms will choose prices to maximize profits, but neither firm knows the price charged by the other firm. Calculate Q, Pp, Pc, and profits for each firm.
- 2. Suppose the cost function for a monopoly is given by TC =F+c.q where TC is the total cost, F is the fixed cost and q is the output of the firm. The demand function for the monopoly is given by q = A-bP where A > 0 and b > 0. Find out the profit maximizing price, quantity, and profit for the monopoly. Also find out the expression for the marginal revenue of the monopoly as well as the elasticity of demand facing the monopoly.The marginal revenue curve of a monopoly crosses its marginal cost curve at $30 per unit and an output of 2 million units. The price that consumers are willing to pay for this output is $50 per unit. If it produces this output, the firm's average total cost is $43 per unit. d. How much is total cost? e. What are the firm's economic profits for economic losses)?P, MR, AC, MC B A Demand G | JH MC AC MR Quantity a) Identify the quantity of output the monopoly wishes to supply and the price it will charge. b) Suppose demand for the monopoly's product increases dramatically shifting it to the right. Using the new demand curve determine what happens to the marginal revenue as a result of the increase in demand? Assuming that the marginal cost curve stays the same. how will the new profit-maximizing quantity and price change?
- he inverse demand curve a monopoly faces is p=130-2Q. The firm's cost curve is C(Q)=10+6Q. What is the profit-maximizing solution? The profit-maximizing quantity is ? The profit-maximizing price is $?The graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow. i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant.iv. Examine the effects of ABC Inc. Ltd on consumers.Sara is a single-price, profit-maximizing monopolist who sells her own patented perfume (shown in the graph below). a. What is the equilibrium price and quantity under monopoly conditions? b. If instead Sara had to operate like a competitive firm, what would be the equilibrium price and quantity? c. What is the deadweight loss and total loss to consumer surplus when Sara operates as a monopoly? d. How much surplus would Sara have if she could act as a perfectly price-discriminating monopolist?
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