A monopolist faces a market demand curve given by: Q= 70−p. a) If the monopolist can produce at constant average and marginal costs of: AC = MC = 6. what output level will the monopolist choose to maximize profits? What is the price at this output level? What are the monopolist’s profits? b)Assume instead that the monopolist has a cost structure where total costs are described by: C(Q) = 0.25Q^2 - 5Q + 300. With the monopolist facing the same market demand and marginal revenue, what price- quantity combination will be chosen now? What will profits be? c)Assume instead that the monopolist has a cost structure where total costs are described by: C(Q) = 0.0133Q^3 -5Q + 250. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now? What will profits be? d) Graph the market demand curve, the MR curve, and the three marginal cost curves from (a), (b), and (c).
A monopolist faces a market
a) If the monopolist can produce at constant average and marginal costs of: AC = MC = 6. what output level will the monopolist choose to maximize profits? What is the
b)Assume instead that the monopolist has a cost structure where total costs are described by: C(Q) = 0.25Q^2 - 5Q + 300.
With the monopolist facing the same market demand and marginal revenue, what price- quantity combination will be chosen now? What will profits be?
c)Assume instead that the monopolist has a cost structure where total costs are described by: C(Q) = 0.0133Q^3 -5Q + 250.
With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now? What will profits be?
d) Graph the market demand curve, the MR curve, and the three marginal cost curves from (a), (b), and (c).
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