A monopolist firm faces ten consumers with identical demands given by P = 12 – Q and ten consumers with identical demands given by P = 14 – Q. If the firm has marginal cost MC = 3 + 0.1Q, what is total consumer surplus if the firm is able to practice third-degree price discrimination? Select one: a. 65 b. 75 c. 85 d. 95

A monopolist firm faces ten consumers with identical demands given by P = 12 – Q and ten consumers with identical demands given by P = 14 – Q. If the firm has marginal cost MC = 3 + 0.1Q, what is total consumer surplus if the firm is able to practice third-degree price discrimination? Select one: a. 65 b. 75 c. 85 d. 95

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section14.4: Price Discrimination

Problem 4QQ

See similar textbooks

Similar questions

Q1) Suppose that the inverse demand for a product is represented by the equation P = 50 – Q, where P is the price in Euros and Q is the annual output. Suppose that only one firm produces this product and that the marginal and average cost is €10. Calculate the profit-maximising price for this monopolist. Q2) In autumn, Erling Kagge, who lives alone on an island near the North Pole, puts 50 bags of root vegetables from his harvest into a cave just before a family of polar bears goes in to hibernate. The polar bears do not eat vegetables but would attack Kagge if he approached them. As a result, he is unable to get the vegetables out before the polar bears emerge the following spring. The vegetables spoil at the same rate no matter where he stores them. Which of the following statements best describes this behaviour? A. Kagge’s behaviour is an example of the anchoring effect in action B. Kagge’s behaviour is an example of the framing effect in action C. Kagge’s…
For Question#4 and Question#5 below, how do you get 93 and 5059?
A monopolist faces the demand curve illustrated below. Draw the marginal revenue (MR) curve on the graph. Suppose the marginal cost (MC) and average variable cost (AVC) both equal 6 for all quantity levels, MC = AVC = 6. Draw the MC curve in the graph. 512 11 10 10987 7 6 5 4 3 2 1 0 -1 -2 -3 15. Marginal revenue equals zero at what quantity level? a) Q = 0 b) Q = 6 c) Q = 9 d) Q = 12 e) Q = 18 U 16. At the quantity where Marginal Revenue equals zero a) Revenue is maximized b) The elasticity of demand is greater than one c) The elasticity of demand is less than one d) Marginal revenue equals average revenue b) 8 c) 9 d) 10 e) 11 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 17. Assume the fixed cost equals zero. The profit maximizing monopoly price equals a) 6 b) 12 c) 14 18. Again, assuming the fixed cost equals zero, the monopoly profit equals equals a) 10 d) 16 e) 18
4
Review the graph at right for a nonlinear price discriminating monopolist relying on two prices, $80 and $60. The firm charges a price of $80 for the first 20 units, then a price of $60 for the next 20 units. How much is the total consumer surplus in the market with this form of price discrimination? $(round your answer to the nearest penny) How much is the total producer surplus in the market with this form of price discrimination? $(round your answer to the nearest penny) Price 1 100 90 80 70- 60 50 40 30 20 10- 0 10 20 30 40 50 60 70 80 Quantity MC D 90 100
The accompanying diagram shows the demand , marginal revenue , and marginal cost of a monopolist . [ You are highly recommended to demonstrate your work on the graph as well . ] a ) Determine the profit - maximizing output and price . b ) What price and output would prevail if this firm's product were sold by price - taking firms in a perfectly competitive market ? c ) Calculate the deadweight loss of this monopoly .
6
8.....
Question 5. Monopolist with Price Discrimination [Ch.15] (Handout 7) Consider a market served by a single producer. The total cost function for this monopolist is TC= 050. The monopolist's marginal cost is: MC-Q. Suppose there are two classes of buyers in this market. The demand functions for the two classes are: Class 1: P-10-Q/2 (or Q-20-2P), Class 2: P-14-2Q (or Q-7-P/2) When the monopolist CANNOT distinguish between the two classes, we can graph the market demand curve and the monopolist's MR as shown in the graphs below. Class I P 10 71 CSI P Class I 10 7 PA CSI 14 P Class II 14 10 CS II D₂ D₁ 3.2 20 Q Suppose the monopolist acts as a third degree price discriminator. By the following questions, we are finding the price and quantity pairs that a price discriminating monopolist would set for the two classes. With a third-degree price discrimination, we can graph the market demand curve and the monopolist's MR as shown in the graphs below. 2.8 7 Class II 7 CS II D₂ MR₂ D₂ MR 4 10 20…
14.22. A monopolist has a cost function of c(y) = y so that its marginal costs are constant at $1 per unit. It faces the following demand curve: 0, D(p) = { 100/p if p 20; (a) What is the profit-maximizing choice of output? (b) If the government could set a price ceiling on this monopolist in order to force it to act as a competitor, what price should they set? (c) What output would the monopolist produce if forced to behave as a competitor?
The figure at right shows the demand line, marginal revenue line, and cost curves for a single-price monopolist. Now suppose the monopolist is able to charge a different price on each different unit sold. The profit-maximizing quantity for the monopolist is whole number.) (Round your response to the nearest D Price ($) 1000- 900- 800- 700- 600- 500- 400- 300- 200- 100- 0- 0 MC ATC D MR 50 100 150 200 250 300 350 400 450 500 Quantity 17
THREE PART PROBLEM! Answer all parts to solve! What would be the amount earned by a single-price monopolist? If the company is a perfectly price discriminating monopolist, what quantity will it provide and what will be the market’s consumer surplus? A) Q = 500CS = $6,250 B) Q = 360CS = $9,720 C) Q = 480CS = $4,320 D) Q = 360CS = $3,240 E) Q = 500CS = $0 F) Q = 480CS = $0 CS=consumer surplus In 1983, many courts ruled that taxi companies did not have the right to act as monopolies. If all barriers to entry are removed and the market for rides becomes perfectly competitive, what will the long-run price be?