2. In the following table are demand and cost data for a pure monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total profit will the monopolist receive at the profit-maximizing level of output? Quantity Price revenue 0 1 2 3 4 5 6 O 9 10 $34 $ 32 30 28 26 24 22 20 18 16 14 Total Marginal Total revenue cost มี $ 20 36 46 50 54 56 64 80 100 128 160 Marginal cost $

2. In the following table are demand and cost data for a pure monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total profit will the monopolist receive at the profit-maximizing level of output? Quantity Price revenue 0 1 2 3 4 5 6 O 9 10 $34 $ 32 30 28 26 24 22 20 18 16 14 Total Marginal Total revenue cost มี $ 20 36 46 50 54 56 64 80 100 128 160 Marginal cost $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the following situation, what should the monopolist do to maximize profit? Select the best answer. A monopolist is currently producing a level of output such that marginal revenue is $143 and marginal cost is $109. The monopolist then sets a price based on demand for the current level of output. Answer 2 Points Keyboard Shortcuts The monopolist should decrease output and decrease price. The monopolist should increase output and increase price. The monopolist should incs The monopolist should decrease output and increase price.
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2. Given the demand curve of the monopolist Q = 60 - 2P and the cost function of the monopolist TC = 50-4Q+ 0.5 Q^{2}, Then find: A. The inverse demand function, average revenue, the marginal revenue functions, marginal cost function? B. Find the level of output and price that maximizes the monopolist profit? C. The level of profit at equilibrium. D. Show graphically profit maximization level of output?
Suppose a monopolist faces a market demand that is the first two columns in the table below. Also, in the short run, assume that Total Fixed Cost equals $100 and the monopolist has Total Variable Cost according to the table. Find Total Revenue for each price and quantity combination, and then Marginal Revenue as price falls and quantity increases. Fill in the rest of the costs in the table and find profit at each price and quantity combination as the difference between Total Revenue and Total Cost. If profit is less than zero that indicates a loss. What is the maximum profit you found in this table? At what quantity and price combination is profit maximized for this monopolist? Next, verify this result by using Marginal Analysis to find the profit maximizing price and quantity combination. For each quantity, ask yourself if Marginal Revenue exceeds Marginal Cost. If it does, then profits would be increased by producing that quantity. As you go down the table to higher quantities, stop…
Please describe each step to solve the problem presented below:
Question 2. A monopolist sells the same product at the same price into two different markets. The demand for the product in market #1 is denoted D₁ (p) = 30 - 2p where p is the unit price. The demand for the product in market #2 is given by D₂ (p) = 80 - 3p. (a) If the monopolist sets a price of $20 per unit, what is the total demand? (b) Explain why elasticity of total demand is not defined at a unit price of $15.
QUESTION 3 A monopolist has a cost function of c(x) = x so that its marginal cost is constant at $1 per unit. It faces the following demand curve: D(p) = {100/p 100/p if p > 20 if p ≤ 20 A. What is the profit-maximizing choice of output/price for the monopolist? Graphically represent the monopoly market. B. If the government sets a price ceiling on the monopolist in order to force it to act as a competitor, what price should the government set? C. What output would the monopolist produce if forced to behave as a competitor? D. Based on the information in parts A - C, find the consumer-, producer-, and social surpluses before and after the government intervention.
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QUESTION 1 A. The total cost function for a monopolist is given by TC = 44,000 + 180Q + 0.03Q² and the demand function is P = 420 – 0.06Q per unit of output. i. What is the profit maximising level of output? ii. Calculate the profit maximizing price. iii. Calculate total profit at the profit maximising level of output.