6. A monopolist firm has two long-run choices: producing with short-run cost function C(q) = 30 + 5q, or exiting the market. If the inverse demand function of the market is p(g) = 15 – q, will the monopolist shut down in the short run? Will it exit the market in the long run? A. Shut down in the short run; exit in the long run B. Shut down in the short run; not exit in the long run C. Not shut down in the short run; exit in the long run D. Not shut down in the short run; not exit in the long run

6. A monopolist firm has two long-run choices: producing with short-run cost function C(q) = 30 + 5q, or exiting the market. If the inverse demand function of the market is p(g) = 15 – q, will the monopolist shut down in the short run? Will it exit the market in the long run? A. Shut down in the short run; exit in the long run B. Shut down in the short run; not exit in the long run C. Not shut down in the short run; exit in the long run D. Not shut down in the short run; not exit in the long run

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Profit-maximization: Non-competitive Market A monopolist in the makeup industry produces two makeup products F and G for which the demand functions, respectively, are:1. Find the profit-maximizing quantity of output for each product.2. Find the profit-maximizing price for each product.3. What is the maximum profit that the firm could earn?
53) A monopolist faces a straight-line demand curve and is currently producing an output level of 2000 units receiving $10 000 in total revenue. At an output of 1000 units the marginal revenue for this firm would be A) 0. B) $2.50. C) $5.00. D) $10.00. E) Impossible to tell with the given information.
Exercise 3.8. Dayna's Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C = 100 - 5Q + Q², and demand is P = 55 - 2Q. a) What price should DD set to maximize profit? What output does the firm produce? How much profit and consumer surplus does DD generate? b) What would output be if DD acted like a perfect competitor and set MC = P? What profit and consumer surplus would then be generated? c) What is the deadweight loss from monopoly power in part (a)? d) Suppose the government, concerned about the high price of doorstops, sets a maximum price at $27. How does this affect price, quantity, consumer surplus, and DD's profit? What is the resulting deadweight loss? e) Now suppose the government sets the maximum price at $23. How does this decision affect price, quantity, consumer surplus, DD's profit, and deadweight loss? f) Finally, consider a maximum price of $12. What will this do to quantity, consumer surplus, profit, and deadweight loss?
A movie monopolist sells to college students and other adults. The demand function for students is Q = 840 - 100P, and the demand function for other adults is Q = 1,600 - 100P. Costs is c(Q) = 12 +0.005Q2m per ticket, where Q=Qs+ QA- Instructions: Round your answers to 2 decimal places. a. What prices will the monopolist set when she can discriminate? Pstudent = $ per ticket. Padult = $ Profit = $ per ticket. b. What if demand for adults increases to Q = 1,800 - 100P? Pstudent = $ Padult = $ Profit = $ per ticket. per ticket. c. When adult demand increases, the adult price: decreases. does not change. increases. d. When adult demand increases, the student price: decreases. increases. does not change.
Give explanation of the correct option and explanation of the incorrect options. Note: Dear expert hand written is not allowed.
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.
Subpart 7
A single price monopolist has a cost function of c(Q) = 10 + Q, where Q is output. It faces the following demand curve: Q°(p) = 0, if p > 24 and Q°(p) = 120/p, if p s 24. What is the profit-maximizing choice of output? The profit maximizing choice of output is = At this optimum level of output, calculate the consumer surplus. In addition, by drawing a graph, show the area representing the producer surplus (label it by PS) and the area representing the deadweight loss (label it by DWL). Calculate the values of producer surplus and deadweight loss.
What is the answer and why?
For Question#4 and Question#5 below, how do you get 93 and 5059?
Suppose you are a monopolist and you have two customers, A and B. Each will buy either zero or one unit of the good you produce. A is willing to pay up to $35 for your product; B is willing to pay up to $10. You produce this good at a constant average and marginal cost of $8. If you could not engage in third-degree price discrimination, what price would you charge? OA $10. OB. $15. OC. $35. OD. $45. If you could practice third-degree price discrimination, you will earn a profit of $ (For simplicity, assume that if a consumer is indifferent between buying and not buying, he will buy.) Click to select your answer(s)
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.