5. A firm is a monopoly in a protected (home) market with demand given by Q(P) = 28 – 2P. The firm'scost function is TC = 4q. The firm has a capacity of K = 20 units.A. What is the profit maximizing P and q for the monopolist?Now suppose the firm can also sell (the same product) in world the market, where the world price isPw = 5. In the world market the firm is a competitive firm: It assumes that it can sell any quantity inthe world market at price Pw = 5. Let qw be the quantity it sells in the world market, and let qa be thequantity it sells in the home market.B. What are the profit maximizing qw, and qa?C. What is the price in the home market?D. What is the deadweight loss? Here it is perhaps it is helpful to ask: What is the home marketquantity qa that maximizes the sum consumer surplus in the home market and the firm'stotal profits (world and home market profits)?

Only the first part is answered. Repost the question with the remaining parts Monopoly has one…

A firm is a monopoly in a protected (home) market with demand given by Q(P) = 28 – 2P. The firm's cost function is TC = 4q. The firm has a capacity of K = 20 units. %3D A. What is the profit maximizing P and q for the monopolist?

A firm is a monopoly in a protected (home) market with demand given by Q(P) = 28 – 2P. The firm's cost function is TC = 4q. The firm has a capacity of K = 20 units. %3D A. What is the profit maximizing P and q for the monopolist?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A firm is a monopoly in a protected (home) market with demand given by Q(P) = 28 – 2P. The firm's
cost function is TC = 4q. The firm has a capacity of K = 20 units.
A. What is the profit maximizing P and q for the monopolist?
Now suppose the firm can also sell (the same product) in world the market, where the world price is
Pw = 5. In the world market the firm is a competitive firm: It assumes that it can sell any quantity in
the world market at price Pw = 5. Let qw be the quantity it sells in the world market, and let qa be the
quantity it sells in the home market.
B. What are the profit maximizing qw, and qa?
C. What is the price in the home market?
D. What is the deadweight loss? Here it is perhaps it is helpful to ask: What is the home market
quantity qa that maximizes the sum consumer surplus in the home market and the firm's
total profits (world and home market profits)?

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