4. Multi-plant monopolist:A monopolist has access to two production processes with the following marginal cost curves: MC = 12 +r andMC2 =y, where output in production process 1 is r, output in production process 2 is y and hence total outputproduced is Q =r+y.(a) During peak season, the monopolist faces the following demand curve: P = 125 – Q. How much should heproduce at each facility to maximize profits?(b) During off season, the monopolist faces a reduced demand given by: P= 25 - Q. How much should he produceat each facility to maximize profits?

profit maximization is the short run or long run process by which a firm may determine the price,…

4. Multi-plant monopolist: A monopolist has access to two production processes with the following marginal cost curves: MC = 12 +z and MC2 = ty, where output in production process 1 is z, output in production process 2 is y and hence total output produced is Q = z+y. (a) During peak season, the monopolist faces the following demand curve: P 125 – Q. How much should he produce at each facility to maximize profits? (b) During off season, the monopolist faces a reduced demand given by: P = 25 - }Q. How much should he produce at each facility to maximize profits?

4. Multi-plant monopolist: A monopolist has access to two production processes with the following marginal cost curves: MC = 12 +z and MC2 = ty, where output in production process 1 is z, output in production process 2 is y and hence total output produced is Q = z+y. (a) During peak season, the monopolist faces the following demand curve: P 125 – Q. How much should he produce at each facility to maximize profits? (b) During off season, the monopolist faces a reduced demand given by: P = 25 - }Q. How much should he produce at each facility to maximize 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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A monopolist book publisher with a constant marginal cost of 2 and no fixed costs sells novels in only two countries. Assume the inverse demand curve in country 1 is given by P₁ = 10-Q and the inverse demand curve in country 2 is given by P₂ = 18-Q Assuming book shipments across countries are banned so that price discrimination occurs. What is the equilibrium price and quantity of books sold by the monopolist in country 1? Continuing to assume price discrimination, what is the equilibrium price and quantity of books sold by the monopolist in country 2? If book imports are permitted in both countries so that price discrimination is impossible, what is the equilibrium price and quantity sold in the two countries combined? P=1, Q=16 P=1, Q=12 P=4, Q=8 11 P=6, Q=6 P=4. Q=14 P=6, Q=12 P=8, Q=10 P=10, Q=8 P=6, Q=20 P=7, Q=20 P=10, Q=8 P=12, Q=6
Refer to the accompanying table, which represents the costs and production for a monopolist. Price Quantity Fixed Cost Variable Cost $20 0 $10 $0 $18 1 $10 $5 $16 2 $10 $8 $14 3 $10 $18 $12 4 $10 $30 $10 5 $10 $44 1) At Q=2, the marginal cost of this firm is $ ____ 2)The profit made by this profit-maximizing firm is $ __
(a) Does a monopolistically competitive firm have an incentive to produce at the level of output that minimizes the average total cost at the long run equilibrium? Explain with a diagram. (b) Suppose CLP Holdings Limited is a natural monopolist with constant marginal cost. Draw a diagram to indicate the profit-maximizing level of output, the profit-maximizing price, and the size of the profit. If the government wants to increase the market efficiency through price regulation, would you suggest the government setting the price equal to the firm’s marginal cost or its average total cost? Explain in detail with the diagram in part (i).
Q)Economics A market comprises two consumers groups: high-demand types and low-demand types. The high types have demand QH = 10 – P and low types have demand QL = 8 – P. If a monopolist has marginal cost MC = 1 + Q, what is the profit maximising price the monopolist would charge if they are not able to price discriminate? a. 5 b. 6 c. 4 d. 7
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Use the following to answer questions (1)-(6): Suppose a monopolist sells a product to consumers for which a particular consumer's choice is whether to buy 1 unit of the product or not to buy the product. In the absence of price discrimination, the market demand for the monopolist's product is: Q-150-%P. Further, the firm's short-run total cost is: TC-1000 + 100Q. Now, knowing each consumer's reservation price, imagine the monopolist wishes to engage in first-degree price discrimination. [1] A particular consumer's reservation price corresponds to the maximum amount they a willing to pay to buy 1 unit of the product. A. B. [2] Wishing to maximize profit from first-degree price discrimination, the monopolist should sell a quantity equal to: A. 50 B. 75 C. 100 D. None of the above [3] Continuing question (2), at the quantity chosen the consumer willing to pay the least for the product has a reservation price exceeding $50. A. B. [4] A. B. C. D. [5] True False A. B. C. D. [6] A. B. True…
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2. A monopolist sells tours of a stately Montana home to two groups of consumers, Montanans (M) and others (O). The monopolist knows the total demand for group O, which is Qo=100-2P, and the total demand for group M, which is QM =80-2P. The monopolist is able to identify consumers by inspecting their IDs and can thus apply third-degree price discrimination. The monopolist's cost function is C(G) = 4Q + 20. a. What price will the monopolist charge for group O? What price will the monopolist charge for group M? What is the monopolist's total profit? For the next questions assume that it has become illegal to charge different prices and thus the monopolist must charge the same price to everybody. b. Write down equations representing (1) aggregate demand and (2) marginal revenue at all possible prices. Find the profit maximizing price and output. Will both O's and M's purchase tours, or only one or the other? c. Suppose that the monopolist charges $44. What is total consumer surplus at…
2. A monopolist has two specific demanders with demand equations: qA = 10 – p and qB = 10 – 2p. This monopolist implements an optimal two-part tariff pricing scheme, under which demanders pay a fixed feea for the right to consume the good and a uniform price p for each unit consumed. The monopolist chooses a and p to maximize profits. This monopolist produces at constant average and marginal costs of AC = MC = 2. The monopolist’s profits are __________ and the average price paid by demander B is _________.