2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) c) 9=e-²p+16 q= 20000 q=400 - 8p

2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) c) 9=e-²p+16 q= 20000 q=400 - 8p

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A monopoly profit-maximizes by selling 700 tables each hour. At this level of production, it has…

A: The profit-maximizing alternative for the monopoly will be to produce at the quantity where marginal…

Q: Consider a monopoly with a constant marginal cost of 10 that faces the following inverse demand…

A: Please find the answer below. MONOPOLY: A monopoly is a situation with a single seller in the…

Q: Two firms, 1 and 2, compete in price Market demand in period t is given by D(t) = AtD(p) with A > 0…

A: Given,The market consists of two firms, 1 and 2.The colluding firms are following monopoly price.The…

Q: 3. A monopolist can produce at a constant marginal cost of c=5 (that is cost of producing q units is…

A: Under a monopoly, a single seller faces the entire market demand on his own. Here, the seller…

Q: Mustapha maintains a monopoly in the holographic TV market because of its patent, but it is about to…

A: Ans. Under Monopoly, there is a single seller of a product in the market with market power.…

Q: Suppose two firms engage in simultaneous quantity competition. Both firms have 0 marginal cost.…

A: The Cournot model is an oligopolist form of market structure. It describes an industry structure in…

Q: The quantity that maximise total surplus (the sum of consumer and producer surplus) is__? Because…

Q: CHP is a monopoly manufactorer who faces tbge following demand curve for its product in two…

A: A monopoly manufacturer refers to a company or entity that has exclusive control over the production…

Q: Suppose a representative monopolistic firm faces the following demand function: Pi = 20-2qi where pi…

Q: Suppose that a monopolist offers two different products with demand functions P1 = 56 – 4q1 P2 = 48…

A: Profit is the difference between total cost and total revenue from both demand function .…

Q: 1. Suppose a firm operates as a monopoly in the domestic (home) market for a product. The demand for…

A: A monopoly refers to a market structure where a single firm or entity is the sole producer or seller…

Q: A company operates two plants which manufacture the same item and whose total cost functions are C₁…

A: A monopoly market is represented by a single seller in the market. The single seller in the market…

Q: The demand and total cost functions for a monopoly firm are: Q(P) = 39.5 – 0.5P TC(Q) = 60 – Q + 0.5…

A: Since you have asked a question with multiple subparts, we will answer the first three subparts for…

Q: A firm is originally operating as a single-price monopolist that faces a market demand curve…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Suppose that a monopoly firm supplies to two different markets with the demand functions: Market 1:…

A: Given , Market 1 Demand function : q1 = 100 - 2p1 + p2 Market 2 Demand function : q2 = 150 + p1 -…

Q: a)What is its profit? b) What are the consumer surplus, total surplus, and deadweight loss? c) How…

A: The market situation where a single seller faces the entire market demand all by himself is known as…

Q: 4. Consider a monopolist with cost funetion c(q) = 20g, who is facing two con- sumers. The…

A: c=30q q1 = 100-p q2 = 300-3p

Q: . Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the…

A: TC = 4q So derivating TC with respect to q we get MC MC = 4

Q: not use ai please Suppose further that each prevented case is considered to have a benefit of…

A: Vaccination programs are crucial for preventing the spread of infectious diseases, offering both…

Q: Total consumers can be divided into Group A and Group B, and it is assumed that a monopoly company…

A: Price discrimination refers to the situation when the producer charges different prices from the…

Q: can be shown as P = 3 000 - 100Q. It has fixed costs of R1 000 and additional cost per unit produced…

A: The marginal cost is the change in the total cost that arises when the quantity produced is…

Q: In a market with demand Q = 2,310 − p, there are 3 identical firms, A, B and C; each with a total…

A: Perfect Competition:Many buyers and sellers.Homogeneous (identical) products.Easy entry and…

Question

2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for
each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q
a)
b)
c)
g=e=²p+16
20000
2
9=
P
q=400 - 8p

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Part a

Part b

Part c

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Price 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 1 0 45 90 135 180 225 270 315 360 405 450 495 540 585 630 Quantity MR <<--MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC(Q) = AC(Q) for all Q. Calculate consumer surplus if the monopoly charges the (single) profit maximizing price 675
1750 1500 1250 1000 750 500 250 0 1200 3600 6000 8400 The figure above shows demand and marginal revenue for a single price monopoly. At any price above $ demand is elastic. Assume production costs are constant and equal to $750.00 (i.e., AC = MC = $750). 1) Output is units per day at a price of $ per unit. 2) Profit is $ 3) Consumer surplus is $ 4) If this market was perfectly competitive, output would exceed the single-price monopoly output by Time units.
The demand curve facing a monopoly firm is given by P=200-5Q a) What is the maximum revenue the firm can earn? b) What is the marginal cost when the profit maximizing quantity is 15? c) What is the profit maximizing quantity when the marginal cost is increased to K100? d) At a quantity of 10, what is the percentage change in demand when the price is increased from K150 to K151.5?
Assume a single-price monopolist has an inverse market demand curve given by P(Q)=300-0.5Q, and has a cost curve: C(Q)=125+20Q+0.5Q2. We already know that Monopolist will provide 140 units, Economic profit is 19475, and Economic Rent is 190. If the impact of a 35% ad valorem tax imposed on the consumers in the market. Then: Q1: What is the equilibrium quantity will be sold in the after-tax equilibrium? Q2: What are the economic rents of the monopolist?
Assume the following equations describe the conditions for a monopoly: Qd = 2,000 - 100P TC = 3,500 + 5q + .005q2 Where Qd is the quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions: a. What is the firm's equation for total revenue expressed as a function of quantity? b. What is the firm's equation for marginal revenue expressed as a function of quantity? What is the firm's equation for marginal cost expressed as a function of quantity? c. What is the firm's profit maximizing quantity of output? d. What price will the firm charge for the commodity? e. What would be the socially optimal quantity of output? f. What price would regulators have to establish in order to have the firm produce the socially optimal quantity of output?
Assume a monopoly firm is considering the production of two brands, 1 and 2. Marginal cost is constant at 20 for both products -- assume no fixed costs. The inverse demand for brand i is pi=140−qi−dqj , where i≠j and d is a constant. Part A) Find the firm's QUANTITIES
The demand and total cost functions for a monopoly firm are: Q(P) = 39.5 – 0.5P TC(Q) = 60 – Q + 0.5 Q2 1. What is the firm’s profit πM? Indicate this on the graph. 2. What are the firm's fixed and variable costs? 3. What would be the socially optimal Q* and P* (round to 1 decimal place if needed)
A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 - Q. The demand elasticity of a widget at the monopoly price and quantity is: Multiple Choice -1.5. -2.5. 2
3. Suppose a software monopolist faces two markets for its software, students and professionals. The demand curve of professionals is given by Qp = 200-2Pp and the demand curve by students is given by Qs = 150 - 3Ps. The firm's cost function is C(Q) = 400+5Q. (a) If the firm can price discriminate, what price should it charge in each market to maximize profits? How much profit does it earn? (b) If the firm cannot price discriminate, what price should it charge? Verify that it sells to both markets at this price. How much profit does it earn? Hint: If the firm cannot price discriminate, this means it must treat the two markets as a single combined market.
If the inverse demand curve a monopoly faces is p = 100 - 2Q, MC is constant at 16, and the government imposes an $8 per unit specific tax on the monopoly, the deadweight loss due to both the monopoly and the tax is A) $441. B) $1764. C) $1332. D) $529.
a) With the aid of a diagram, explain how an ordinary monopoly that sells its output at a uniform price, having a total cost function TC=c•Q (where c,0), could earn total revenue that equal the entire area under the market demand curve, leaving customers with no consumer surplus. b) If an ordinary monopoly firm could indeed capture the entire consumer surplus, with the aid of a diagram, indicate graphically the firm’s output and the uniform price at which the firm would sell its product in order to maximize profit.
Given the following information for a monopoly firm: Demand: P = 80 - 5(Q) Marginal revenue: MR = 80 - 10(Q) Marginal cost: MC = 2(Q) + 8 Average total cost at equilibrium is 30 1. At what output (Q) will this firm maximize profit? Number 2. At what price (P) will this firm maximize profit Number 3. What is the total revenue (TR) earned at this output level Number 4. What is the total cost (TC) accrued at this output Number Number 5. What profit is earned Assume this firm is to be regulated. Answer the following questions: 6. Under the Marginal Cost Pricing,what is the optimal quantity Number 7. Under the Marginal Cost Pricing,what is the optimal price Number