4.Assume that a monopolist sells a product with the costfunction C = F + 20Q, where C is totał cost, F is a%3Dfixed cost, and Q is the level of output. The inversedemand function is P60 - Q, where P is the price in%3Dthe market. (i) How much profit does the firm earnwhen it charges the price that maximizes profit ?(ii) At what price will the firm earn zero economicprofits ?

In economics, an inverse demand function is the inverse function of a demand function. The inverse…

4. Assume that a monopolist sells a product with the cost function C = F + 20Q, where C is totał cost, F is a fixed cost, and Q is the level of output. The inverse demand function is P = 60 - Q, where P is the price in the market. (i) How much profit does the firm earn when it charges the price that maximizes profit ? (ii) At what price will the firm earn zero economic profits ?

4. Assume that a monopolist sells a product with the cost function C = F + 20Q, where C is totał cost, F is a fixed cost, and Q is the level of output. The inverse demand function is P = 60 - Q, where P is the price in the market. (i) How much profit does the firm earn when it charges the price that maximizes profit ? (ii) At what price will the firm earn zero economic profits ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Think about a monopolist, the market (inverse) demand function is: P = 30-2Q, his cost function is: C(Q) = 5+ Q?, a. What is the monopolist's optimal quantity and price? b. What is the monopolist's highest profit? %3D
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?
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1. Consider a monopolist where the market demand curve for the produce is given by P = 520 2Q. This monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be expressed as TC = 100Q + Q2 + 50.a. Given the above information, what is this monopolists profit maximizing price and output if it charges a single price?b. Given the above information, calculate this single price monopolists profit.c. At the profit maximizing quantity, what is this monopolists average total cost of production (ATC)?
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Please no written by hand solutions 1. Assume the cost function for a monopolist is given by TC(q) = 30Q; the inverse demand function for the firms' output is p = 120 - Q, where Q is the total output. a. Find the profit-maximizing combination of price and quantity b. Estimate consumer surplus, producer surplus and the deadweight loss associated with this monopolist C. If this industry became perfectly competitive, explain and estimate the consumer surplus, producer surplus and deadweight loss of the industry d. Graph your answers for a, b, and c 2. Now assume that the monopolist above splits into two. Each of two firms has the cost function TC(q) = 30q. a. What are the firms' outputs in a Nash equilibrium of Cournot's model? b. Estimate the economic profits for each firm c. If firm 1 is the leader and firm 2 the follower, find the equilibrium outputs for the Stackelberg solution.
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