A monopolist facing a demand p = 1000 -10Q has costs TC(Q) = 5Q2 + 100Q (a) Calculate the monopolist’s profit maximizing quantity and price and the induced inefficiency (DWL)?
A monopolist facing a demand p = 1000 -10Q has costs TC(Q) = 5Q2 + 100Q (a) Calculate the monopolist’s profit maximizing quantity and price and the induced inefficiency (DWL)?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A monopolist facing a
(a) Calculate the monopolist’s profit maximizing quantity and price and the induced inefficiency (DWL)?
(b) Suppose, on top of the costs above, the firm now also pays;
(i) A flat fee of 1000 dollars, or (ii) half of the profits, or (iii) 150 dollars per unit sold, or (iv) half of the revenues.
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