2.)Market demand in a monopolistic market is represented by P = 40,000 - 2Q with the P as the market price while Q is the market output. Using this demand function, the relevant marginal revenue function will be MR = 40,000 - 4Q. The monopolist' total cost function is given as TC = 50,000,000 + 2Q + 0.5Q? with TC as the total cost level and Q as the output of the monopolist. Relevant marginal cost function will be MC = 2 + Q. Use the information provided in this item to answer the following questions. %3D i.)What is the profit maximizing output and price for this monopolist? What is the maximum profit level of this monopolist? ii.)What is(are) the break even quantity(ies) of this monopolist? iii.)Do you agree that this monopolist is over pricing and under producing? Answer yes or no but justify your answer by comparing the price and output under perfect competition.

2.)Market demand in a monopolistic market is represented by P = 40,000 - 2Q with the P as the market price while Q is the market output. Using this demand function, the relevant marginal revenue function will be MR = 40,000 - 4Q. The monopolist' total cost function is given as TC = 50,000,000 + 2Q + 0.5Q? with TC as the total cost level and Q as the output of the monopolist. Relevant marginal cost function will be MC = 2 + Q. Use the information provided in this item to answer the following questions. %3D i.)What is the profit maximizing output and price for this monopolist? What is the maximum profit level of this monopolist? ii.)What is(are) the break even quantity(ies) of this monopolist? iii.)Do you agree that this monopolist is over pricing and under producing? Answer yes or no but justify your answer by comparing the price and output under perfect competition.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
Question 8 Firm D is a monopolist that faces a market with inverse demand given by: P = 120-4Q Where Q is Firm D's output level. Firm D's total cost function is given by: TC(Q) = 11Q +42 Assuming that Firm D can perfectly (1st degree) price discriminate, what is Firm D's profit maximizing output level, Q*? (Hint: Because Firm D can perfectly price discriminate, its Marginal Revenue function is equivalent to inverse demand).
a) Find and highlight the consumer surplus in the monopoly in the diagram.b) Draw a possible marginal cost curve for the monopolist into the diagram that is consistentwith all the other curves that are already given. c) Based on the marginal cost curve that you constructed in part (b), find and highlight themonopolist’s total costs at the monopoly price in the diagram. d) Briefly (200 words max) explain the shape of the marginal revenue curve as compared tothe demand curve in the diagram.
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A monopolist has discovered that the inverse demand function of a person with income Y for the monopolist’s product is P = 0.002Y-Q where P is the price, Y the income, and Q is the output. The monopolist can observe the incomes of its consumers and hence vary its price accordingly. The monopolist has a total cost function C(Q) = 100Q. A monopolist has a constant marginal cost of £2 per unit and no fixed costs. He faces two separate markets in the United States and in the UK. The goods sold in one market are never resold in the other. He sets one price P1 for the US market and another price P2 for the UK market (both measured in £). The demand in the United States is given by Q1=7,000-700P1 and the demand in the UK is given by Q2=1,200-200P2. Calculate the profit maximising output produced and price charged in each country by the price-discriminating monopolist and comment in which country the price charged is higher and by how much. Explain if your answer above is as expected by…
A monopolist faces two geographically distinct markets, say market 1 is New York and market2 is California. The inverse demand curves in each market are P1 = 300 – Q1 and P2 = 200 – Q2. Themonopolist’s total cost function is C(Q) = 0.5Q^2 + 50Q and marginal cost function is MC(Q) = Q + 50,where Q = Q1 + Q2 is the total quantity that it produces. Your job is to find out how much quantity to sellin each market in order to maximize profit.a) Carefully express this monopolist’s profit maximization problem.b) State the two equations that characterize the profit-maximizing amounts of Q1 and Q2, given an interiorsolution with positive quantities sold in each market.c) Solve these two equations for Q1* and Q2*.d) Find the prices P1* and P2* that the monopolist should charge in each market.
Consider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=813-7p, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 7 Q What is the profit maximizing price for this monopolist? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)
Now suppose that the monopolist chooses q to maximise its profit. The number of units that the monopolist would sell is __? The monopolist’s revenue at this profit maximising quantity would be__? The absolute value of the price elasticity of demand at this profit maximising quantity would be__?
Suppose the inverse demand function for a monopolist's product is given by P = 150-20 and the total cost function is given by TC = 100 + 300 1. Determine the profit-maximizing price and quantity 2. Determine the maximum profits II. Suppose the inverse demand function for a monopolistically competitive firm's product is given by P = 100 - 20 and the cost function is given by TC = 52 +4Q 1. Determine the profit-maximizing price and quantity 2. Determine the maximum profits. 3. Can we say that this firm is operating in the long-run or short-run equilibrium at the equilibrium price and quantity? III. Suppose the inverse demand for a monopolist's product is given by P = 110-10 The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC₁ = 3Q₁, and the marginal cost of producing in plant 2 is MC₂ = 2Q₂. 1. How much output should be produced in each plant to maximize profits? 2. What price should be charged for the product?
Assume you were provided the following information for a monopolist: Inverse Demand Function: P = 100 - 2Q Total Cost Function: TC = 10 + 2Q The monopolist has a constant marginal cost of $2. What is the profit maximizing level of output?
A monopolist has the following marginal revenue function MR = 1,600 - 20Q, and marginal cost function MC = 200 + 30Q and faces the following the demand curve p 1200-10Q. And the total cost function is TC= 200Q+15Q². Q refers to the number of units produced by the monopolist. Find the profit maximizing quantity (in number of units produced) for this monopolist. The result should be an integer number, no decimals (e.g. if the result is 3.65 write 4, if the result is 3.64, write 3). = Your Answer: