Homework Help is Here – Start Your Trial Now!
Business
Economics
A monopoly's inverse demand function is   p=160-4Q   and it has no fixed costs. Initially marginal cost is 12 (A constant MC and no fixed costs means ATC = MC, Can you prove this to yourself?).  Determine the price, quantity, consumer surplus, profit, total surplus, and deadweight loss .

A monopoly's inverse demand function is   p=160-4Q   and it has no fixed costs. Initially marginal cost is 12 (A constant MC and no fixed costs means ATC = MC, Can you prove this to yourself?).  Determine the price, quantity, consumer surplus, profit, total surplus, and deadweight loss .

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
A monopoly's inverse demand function is 
 
p=160-4Q
 
and it has no fixed costs. Initially marginal cost is 12 (A constant MC and no fixed costs means ATC = MC, Can you prove this to yourself?).  Determine the price, quantity, consumer surplus, profit, total surplus, and deadweight loss . 
Expert Solution
Step 1

Given Information:

  • Inverse demand function: p=160-4Q
  • MC=12, and ATC=MC=12

We have to compute:

  1. Price (P)
  2. Quantity (Q)
  3. Profit 
  4. Consumer Surplus (CS)
  5. Total Surplus (TS)
  6. Deadweight loss (DWL)
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Production & Pricing Decisions
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS