The demand function for a monopolist is given by x =100 – 4p, where x is the number ofunits of product produced and sold and p is the price per unit.Find : (1) total revenue function (ii) average revenue function (ii) marginal revenue func-tion and (iv) price and quantity at which MR = 0.7. A firm knows that the demand function for one of its products is linear. It also knows thatit can sell 1000 units when the price is Rs.4 per unit and it can sell 1500 units when theprice is Rs.2 per unit.Determine :(i) the demand function (ii) the total revenue function (iii) the average revenue function (iv)the marginal revenue function.6.

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6. The demand function for a monopolist is given by x=100– 4p, where x is the number of units of product produced and sold and p is the price per unit. Find : (i) total revenue function (ii) average revenue function (ii) marginal revenue func- tion and (iv) price and quantity at which MR = 0.

6. The demand function for a monopolist is given by x=100– 4p, where x is the number of units of product produced and sold and p is the price per unit. Find : (i) total revenue function (ii) average revenue function (ii) marginal revenue func- tion and (iv) price and quantity at which MR = 0.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to the scenario above. The monopolist profit is maximized when the quantity sold is____ packs. How would be the price? a)Q=50, P=2 b)Q=75, P=5 c)Q=100, P=2 d)Q=150, P=5
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1. Suppose that a monopolist has a patent for widgets and the market demand curve Q(P) is:Q(P) = 60 – 2P,where P is the price in dollars and Q is quantity.A. If MR(Q) > 0, then total revenue increases by selling more units. If MR(Q) < 0, then total revenueincreases by selling fewer units. Calculate the Q* such that MR(Q*) = 0: this will be where total revenueis maximized.B. Determine the price P* the monopolist must charge in order to sell Q* units by plugging your answer forQ* into the inverse demand curve P(Q). C. Neatly draw a graph showing the demand curve for widgets and the marginal revenue curve, carefullyshowing the vertical and horizontal intercepts. Also show Q* and P*. PLEASE SHOW ALL WORK
3. Suppose the inverse demand function is linear: p(q) = 24-q The monopolist's cost %3D function is c(g)-0.5g*. Assume the monopolist must charge a uniform price. (a) Find the optimum monopoly price and quantity. Also calculate the deadweight loss. (b) Suppose the governmet can levy a lump-sum tax T (i.e., a fixed amount indepen- dent of produetion) and an excise tax t per unit of production on the monopolist. These taxes can be negative, in which case they are subsidies. The proceeds of these taxes can be transferred to consumers. The monopolist is always free to quit the market, in which case she does not have to pay any taxes. The government wants to maximize the ensumer welfare: Pind the optimum vaues of t and
A2) Compute the point elasticity of demand.
3. Suppose that the elasticity of demand is e = -1.5 at every point on the demand curve and that a monopolist has a marginal cost of MC = 5. What price does the monopolist set?
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The demand equation for a monopolist is given by P = 50 - 2Q and the marginal cost is $10. i Compute the deadweight loss associated with monopoly pricing. ii. If P = 50 - 4Q, what is the deadweight loss? iii. Based on your answers to (a) and (b), how is the deadweight loss related to the slope of the demand curve?
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Suppose that a monopolist faces inverse demand given by P = 100 - 10Q and marginal cost given by MC = 20. 1. What is the profit function? 2. What is the marginal revenue function? 3. What is the equilibrium quantity? 4. What is the equilibrium markup?