A monopoly is faced with a linear demand, given by P = 120 -2Q. P is the price and Q is the quantity. The total cost of the monopoly is given by TK = Q2 Calculate the welfare in this market if the monopoly maximizes profit. Answer:
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A: Referenceshttps://www.investopedia.com/terms/m/monopoly.asphttps://www.investopedia.com/terms/m/marg…
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- For the monopoly represented by the figure to the right, at what quantity is its revenue maximized? (Hint: Revenue is maximize where MR = 0.) Why is revenue maximized at a larger quantity than profit? Show the revenue curve. In the figure to the right, let D be demand and MR be marginal revenue. The quantity at which revenue is maximized is Q = 10 units. (Enter your response rounded to the nearest whole number.) Revenue is maximized at a larger quantity than profit because A. costs are decreasing in output. OB. marginal costs can be negative. C. marginal revenue is decreasing in output. OD. D. revenue is greater than profit. OE. profit is decreasing in output. Using the three-point curved line drawing tool, graph the monopoly's revenue curve. Label this curve 'R.' Carefully follow the instructions above, and only draw the required objects. p. $ per unit 30 28- 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 0- 024 100- 90- 80- 70- 60- 50- 40- 30- 20- 10- 0- 6 MR D 8 10 12 14 16 18 20…Consider a monopoly with inverse demand given by P(q)=a-bq and cost function c(q)=cq, where a>c>0 and b>0 are parameters, and q is the quantity supplied by the monopoly. Find the monopoly’s profit-maximizing price and output, and calculate the output and the welfare loss compared to the competitive outcome.Consider a monopoly that faces the demand curve P = 20 − Q, and has the marginal cost curve MC = 2. a) Use the demand curve to find the equation of the marginal revenue curve. b) Find the profit-maximizing price and quantity for this monopoly if the monopoly uses uniform pricing. What is the producer surplus? c) Now, suppose the monopoly wants to increase profits using block pricing. The total cost the monopoly incurs is T C = 2Q. Find the optimal quantities, Q1 and Q2, and their corresponding optimal prices, P1 and P2 that maximize profits using a two-block pricing scheme. What is the new producer surplus? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- Suppose the demand curve for a monopoly firm’s product is given by P = 120 – 2Q. Marginal cost of production is given by MC = 8Q. Find the profit maximizing output.Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit, where the marginal revenue of the 250th unit is $40, the marginal cost of the 250th unit is $50, and the average total cost at 250 units is $60. [Hint: Based on the information given, is the quantity you’re asked to show the profit-maximizing quantity? Think about what has to be true for profit-maximization.] Based on the graph and assuming the firm attempts to profit maximize (and succeeds), what would happen to price, quantity, MR, MC, and ATC? (rise, fall, or stay the same?)The table below shows cost data for producing different amounts of cleaning products. Suppose this market is a monopoly. Use the information in the table to find the output where the monopoly would maximize profit. Price ($) Quantity Total Revenue ($) Total Cost ($) 150 0 0 100 120 5 600 180 100 10 1000 400 90 15 1350 675 80 20 1600 1120 70 25 1750 1750 Profit maximizing quantity: What is the profit the monopoly achieved? $
- Monopoly: Work It Out Earlier we mentioned the special case of a monopoly where MC = 0. Let’s find the firm’s best choice when more goods can be produced at no extra cost. Since so much e‑commerce is close to this model—where the fixed cost of inventing the product and satisfying government regulators is the only cost that matters—the MC = 0 case will be more important in the future than it was in the past. For each demand curve, calculate the profit-maximizing level of output and price as well as the monopolist's profit. a. ?=200−?P=200−Q, fixed cost = 1,000. Profit‑maximizing output Q = Profit‑maximizing price P = $ Monopolist's profit: $ b. ?=4,000−?P=4,000−Q, fixed cost = 900,000 (Driving the point home from part a) Profit‑maximizing output Q = Profit‑maximizing price P = $ Monopolist's profit: $ c. ?=120−12?P=120−12Q, fixed cost = 1,000…Consider a monopolist who faces the following demand function P = 100 – 2Q. The firm’s cost function is given by C(Q) = 10 + 2Q What are the profit maximizing output and price? What is the profit at this point?Price and cost (dollars per unit) PI P2 P3 0 MR 외 Q2 Q3 Quantity (units per hour) Which of the following is true? In the above figure, if the market is S=MC a monopoly, output will be Q1 and price will be P3. perfect competition, output will be Q2 and price will be P2. perfect competition, output will be Q3 and price will be P3. a monopoly, output will be Q3 and price will be P3.
- Question 27 Consider a monopoly market in which the market demand curve is given by P = 240 – 2Q, the marginal revenue curve is MR = 240 – 4Q, the marginal cost curve is MC = 2Q, and there are zero fixed costs. Suppose the government intervenes and turns the market into a competitive market, and all the firms in the market have the same marginal cost curve as the monopolist, MC = 2Q, and zero fixed costs. How much is the resulting gain in total surplus? 300 800 400 600Assume that one of the hot dog vendors successfully lobbies the city council to obtain the exclusive right to sell hot dogs within the city limits. This firm buys up all the rest of the hot dog vendors in the city and operates as a monopoly. Assume that this change doesn't affect demand and that the new monopoly's marginal cost curve corresponds exactly to the supply curve on the previous graph. Under this assumption, the following graph shows the demand (D), marginal revenue (MR), and marginal cost (MC) curves for the monopoly firm. Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and quantity of a monopolist. PRICE (Dollars per hot dog) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 45 Monopoly MC MR 90 135 180 225 270 315 QUANTITY (Hot dogs) D 360 405 450 Monopoly Outcome Deadweight Loss ?The inverse demand curve a monopoly faces is p = 130 - Q. The firm's cost curve is C(Q) = 10 +5Q. What is the profit-maximizing solution? The profit-maximizing quantity is 62.5. (Round your answer to two decimal places.) The profit-maximizing price is $ 67.5. (round your answer to two decimal places.) What is the firm's economic profit? The firm earns a profit of $. (round your answer to two decimal places.)