A drug company produces a new drug. The inverse demand curve for the drug is P=205-20Q, where Q measures the number of pills in millions. Labor costs can be represented by the equation wL=5Q and fixed costs can be represented by the equation rK= million. If the government 100. If the government grants this firm a patent, it will earn profits of Write your response here..... revokes the patent and the firm must sell its drug at a price of 5 because of competition, it will earn profits of Write your response here..... million.

A drug company produces a new drug. The inverse demand curve for the drug is P=205-20Q, where Q measures the number of pills in millions. Labor costs can be represented by the equation wL=5Q and fixed costs can be represented by the equation rK= million. If the government 100. If the government grants this firm a patent, it will earn profits of Write your response here..... revokes the patent and the firm must sell its drug at a price of 5 because of competition, it will earn profits of Write your response here..... million.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You are the manager of a monopolist that produces women shoes and faces a random marginal cost. The demand for women shoes is O = 1000 - 0.1P Marginal cost can be constant at either $60 with a probability of 50% or $40 with a probability of probability of 50%. Draw a graph and plot the demand for shoes. Derive the marginal revenue curve and plot it on the graph. Find the price and output that maximize profits. Find the firm's profits.
Solve as fast as possible. Solve it correctly.
Are products with patents a monopoly?Would it be expensive for another company to replicate?
How will the price and output of a monopolist compare with perfect competition
Suppose that a monopolist has a patent for widgets and the demand curve is given by Q(P) = 12 – 0.02P. The monopolist’s total costs are TC(Q) = 25Q^2 + 500. You may assume that widgets are continuously divisible, like corn oil or sand. a: Find the quantity Q* that maximizes the monopolist’s profit by exploiting the marginalcondition, necessary for profit maximization at an interior solution. Neatly show your work.b: Find the price P* that the monopolist charges. Neatly show your work.c: Neatly graph the marginal revenue and marginal cost curves, with Q on the horizontal axis.d: Label relevant areas on your graph using a, b, c, etc. and fill in the following chart.
A small town with a movie theater has 300 adults and 200 seniors. The theater is considering putting on a special one-time screening of a new movie. This screening has a fixed cost of $2,000, but the marginal cost of selling an additional ticket is zero. According to a survey, all the adults and seniors would be willing to purchase the tickets at $7 and $4 respectively. a. What prices would the movie theater charge for an adult ticket and for a senior's ticket if it wanted to maximize profit? Explain and calculate the profit. b. Suppose a law is passed that prohibits the movie theater from charging different prices to adults and seniors. What price would it set for a ticket now? What is the profit? c. Who is worse off because of the law prohibiting price discrimination? Who is better off? d. If the fixed cost of the concert was $2,500 rather than $2,000, how would your answers to parts-(e) change?
Suppose the demand curve for a monopoly firm’s product is given by P = 120 – 2Q. Marginal cost of production is given by MC = 8Q. Find the profit maximizing output.
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.)
Assume quantities need not be integers. A monopolist incurs marginal cost equal to $2 per unit. This period, it must pay a $80 fixed cost, and faces demand P(Q)=12 – 0.5 x Q. What are its profits in this period?
When selling downloadable software, e-books, and music streaming platforms, the marginal cost of making one more unit is basically zero. The average total cost is currently $1 per book. If a monopoly is operating in this market and is maximizing profits, marginal revenue is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Greater than $0 Less than $0 $0 d $1 e There is not enough information to answer this question.
In first-degree price discrimination, a monopolist manipulates market price by altering the quantity of product supplied to that market. Select one: True False A natural monopoly arises when the firm's technology has economies of scale small enough for it to supply some of the markets at a lower average total production cost than is possible with more than ane firm in the market. Select one: True False If a firm's production function is defined as, y=f(x;,X2Xa), the firm's profit is; II(x,,x, ,x,) = p(y)-w,x, - w,x, - w,x. Select one: True False
How does monopoly determine the optimum production level