A monopolist's costs are given by: C(Q) = 4Q² + 10Q + 100 and it faces the demand function: P= 50 - Q А. What is the firm's profit-maximizing or loss-minimizing output level, and at what price will it sell this output? Would the firm be better off not producing anything, i.e., setting Q = 0, instead? Justify your answer carefully B.

A monopolist's costs are given by: C(Q) = 4Q² + 10Q + 100 and it faces the demand function: P= 50 - Q А. What is the firm's profit-maximizing or loss-minimizing output level, and at what price will it sell this output? Would the firm be better off not producing anything, i.e., setting Q = 0, instead? Justify your answer carefully B.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You own a road resurfacing business called Dahyun Bricks services located in Seoul. You are the only reservicing business in South Korea. Therefore, you have a local monopoly. Your experience running the company for many years has taught you that market demand for your service can be described by the demand function: p = 20 - Q. The cost function is c =q². Therefore, marginal cost equals 2q. Quantity refersto square metre of road resurfacing. Note the Q denotes aggregate market demand and q denotes your production. Of course, if you are the only supplier than q = Q. a) Compute profit maximising price and output. Compute profits. b) The monopoly profit that you have been earning has attracted attention from another firm that will set up operations in South Koreaand compete for market share. You are concerned with losing market share and profit. So, you offer the potential entrant the following deal. Both firms agree to maximise industry profits (joint profits). The potential entrant…
Suppose Delta Airlines is a monopolist in the Atlanta market with a demand schedule:P = 400-.5*Q,and marginal cost scheduleMC=AC=Scomp=100.Scomp is the supply schedule for a competitive market. Find the profit-maximizing price for Delta?
A firm is originally operating as a single-price monopolist that faces a market demand curve P(Q) = 198 –0 and total cost curve equal to TC (q) = 10, 500 + 32Q, with constant MC equal to MC(Q) = 32 for all units produced. Part (a): How much output does the firm produce and at what price is each unit sold for? Part (b): Calculate the firm's profit. The firm now realizes there are actually two distinct groups of consumers that purchase their product, with the following demand functions: P(q1) = 242 – qı P(q2) = 176 – 92 Their total and marginal cost curves have not changed. If the firm wanted to successfully practice third-degree price discrimination: Part (c): How many units of output would they sell to group 1 and how much will each consumer in group 1 pay? Part (d): How many units of output would they sell to group 2 and how much will each consumer in group 2 pay? Part (e): How much profit is earned by the firm when they practice third-degree price discrimination? Part (f): How much…
only question #4 please
Suppose a monopolist's total cost function is given by c = 0.004q +30q + 2000, and the revenue function is r = q(1200 - 6q), where c is measured in dollars and q is measured in tonnes per week. a. Determine marginal cost when g = 50. b. Express profit (n) as a function of q. Determine the profit-maximising level of output and the corresponding maximum profit. Justify your answers. C.
= 240 + 0.5Q², and face 4. A monopolist has the cost function TC(Q) market demand P = 45 – Q. (a) Find the monopoly equilibrium price and output. Find the monopolist's profit.
An amusement park has identified its demand functions as follows: Q = 50-3P The marginal operating cost of each unit of quantity is $5 and there are no fixed costs. The park is a monopolist and exercises significant price making power in the market. 1. If the monopolist charges same price for every unit, for what price are his profits maximized? How many units will be sold at that price? What are his total profits?
Assume quantities need not be integers. A monopolist incurs marginal cost equal to MC=Q per unit and faces demand P(Q)=18 – 3 x Q. If there is no fixed cost for production, what is the total cost of production?
There are two types of consumers: one half of consumers are type 1 (low type) and the other half are type 2 (high type). Type l's demand curve is q1 = 8 – P, while type 2's demand is given by q2 = 12 – P. Consider a monopolist selling its product to these consumers. Assume that the marginal cost is equal to zero. 1.1. Suppose that the firm can charge only one price, P, for each unit. (1) What is the market demand, Q? (Note: Q should be equal to q1 + q2.) What should be P that maximizes the monopoly's profit? For the profit- (2) maximizing P, will both types of consumers purchase the product, or only high type con- sumers purchase? (3) Given the price in (2), what is the resulting social surplus?
Suppose the inverse demand function for a monopolist's product is given by P=100-2Q and the cost function isC(Q)=10+2Q. What is the firm's profit-maximizing maximum profits?A. $1,115B. $1,109C. $1,190.5D. $2,100.5
Suppose the inverse demand for a monopolist's product is given by P(Q) = 70 – .50 The monopolist can produce output in two plants. The marginal cost of producing in plant 1 is MC, = 3Q, and the marginal cost of producing in plant 2 is MC, = Q2. How much out- put should be produced in each plant to maximize profits, and what price should be charged for the product?
A monopolist can produce at constant average total and marginal cost of ATC = MC = $20. (Constant ATC = MC implies that there are no fixed costs.) The firm faces a market demand curve given by QD = 40 - P. The monopolist's marginal revenue curve is given by MR = 40 - 2QD. Graph this situation, then calculate the monopolist's profit-maximizing price-quantity and the monopolist's profits. What output level would be produced by a corresponding perfectly competitive industry? What would be the price level? Calculate the "deadweight losses" from monopolization of the industry. Show the DWL on the graph.