A monopolist can produce at a constant marginal cost of $5 and a fixed cost of $55. It faces a market demand curve given by Q = 24- P/4.Demand: Q = 24 - P/4Inverse Demand: P = 96-4QTotal Revenue (TR) = 96Q-4Q^2Marginal Revenue (MR) = 96 - 8QMarginal Cost (MC) = 5Profit maximizing quantity of monopolist= 11.375Profit maximizing price of monopolist= $50.5Profit of monopolist= $ 517.5625Suppose a competitive firm has the same constant marginal cost of £5. Find the profit maximising output for this firm. What is the price that the competitive firm must charge?The government decides to impose a new policy on this monopolist. In particular, the government wants to introduce price regulation such that the regulated price will consequently make this monopolist earns zero profit only. What is the regulated price that this monopolist should charge? How many quantities of output are produced with this new regulated price?

1) Profit maximising strategy of the competitive firm is producing equilibrium quantity and…

Answered: A monopolist can produce at a constant…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

A monopolist can produce at a constant marginal cost of $5 and a fixed cost of $55. It faces a market demand curve given by Q = 24- P/4.

Demand: Q = 24 - P/4

Inverse Demand: P = 96-4Q

Total Revenue (TR) = 96Q-4Q^2

Marginal Revenue (MR) = 96 - 8Q

Marginal Cost (MC) = 5

Profit maximizing quantity of monopolist= 11.375

Profit maximizing price of monopolist= $50.5

Profit of monopolist= $ 517.5625

Suppose a competitive firm has the same constant marginal cost of £5. Find the profit maximising output for this firm. What is the price that the competitive firm must charge?
The government decides to impose a new policy on this monopolist. In particular, the government wants to introduce price regulation such that the regulated price will consequently make this monopolist earns zero profit only. What is the regulated price that this monopolist should charge? How many quantities of output are produced with this new regulated price?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions