Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized by a demand curve = 125 – 2. In addition, assume that consumers live for two periods t = 1,2, and a monopoly sells motorcycles that lasts for two periods. The marginal cost of motorcycle is $5. Answer the following questions. a) What is the profit for a renting monopoly? b) What is the profit for a selling monopoly?

Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized by a demand curve = 125 – 2. In addition, assume that consumers live for two periods t = 1,2, and a monopoly sells motorcycles that lasts for two periods. The marginal cost of motorcycle is $5. Answer the following questions. a) What is the profit for a renting monopoly? b) What is the profit for a selling monopoly?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 14E

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Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized by a demand curve . In addition, assume that consumers live for two periods , and a monopoly sells motorcycles that lasts for two periods. The marginal cost of motorcycle is $5. Answer the following questions. a) What is the profit for a renting monopoly? b) What is the profit for a selling monopoly?
Consider that there is a continuum of consumers having different valuations for a motorcycle that are summarized using the following p=125-q/2. In addition assume that consumers live for two periods t=1,2 and a monopoly sells motorcycles that lasts for two periods the marginal cost of a motorcycle is $5. What is the profit for a renting monopoly? What is the profit for a selling monopoly?
In British Columbia, Canada a company named after Tim Hortons runs a monopoly on a sweet snack called Timbits! Suppose the demand for Timbits is P=90-Q and the cost function is C-Q How much would the consumer surplus, producer surplus and DWL be in case Tim Hortons a single-price monopoly? Suppose Tim Hortons could install a device in its premises that could immediately 11) predict the willingness to pay of every unsuspecting customer entering its franchise premises and charge them that corresponding amount! Additionally, suppose they could also stop resale of products, and thus become a first degree price discriminatıng monopoly. How much would the consumer surplus, producer surplus and DWL be in this case?
Suppose a monopoly has a cost curve equal to C= 6400 + 100a. The firm's demand curve is p= 500 - 4Q. (Round all nurmeric responses to two docimal places.) What is the monopoly's unregulated profit-maximizing quantity? What is the unregulated profit-maximizing price? $. What is the monopoly's profit? $ What would be the deadweight loss? 5
A monopoly barber sells haircuts to adults for 30 and A monopoly barber sells haircuts to adults for $30 and to children for $10. Let ηΑ represent adults’ elasticity of demand for haircuts and let ηC represent children’s elasticity of demand.a. Explain why |ηΑ| and |ηC| must both be greater than 1.b. Find a formula for ηA in terms of ηC.c. What is the largest possible value for |ηΑ|? A monopoly barber sells haircuts to adults for 30 and
The demand equation for a monopolist is given by P = 50 - 2Q and the marginal cost is $10. i Compute the deadweight loss associated with monopoly pricing. ii. If P = 50 - 4Q, what is the deadweight loss? iii. Based on your answers to (a) and (b), how is the deadweight loss related to the slope of the demand curve?
Barbara is a producer in a monopoly industry. Her demand curve and total cost curve are given by Q = 160 - 4P and TC = 4Q. Barbara will produce ✓ units. Barbara will charge a price of Barbara will make a profit of Suppose now the government imposes a tax of 4 dollars on each unit sold. With the tax: Barbara will produce ✓ units. Barbara will receive a price per unit of higher). Barbara will make a profit of In addition to the tax, suppose the government imposes a business levy (a fixed cost) of $500. With this levy: Barbara will produce Barbara will charge a price of Barbara will make a profit of ✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be ✓ units. ✓. Note: we're looking for the Barbara receives, not the price consumers pay (which will be higher).
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…
You are a consultant who is advising a monopoly on the optimal pricing strategy. Your analysis has yielded the following information. • The marginal cost (MC) is $3. • The demand equation is P = 90 - 3Q . The total cost (TC) is given by 35+ 3Q The marginal revenue (MR) is given by 90 - 6Q Based on this information, answer the following questions. Show FULL calculations! (a) Following the concepts of profit maximization, what is the profit maximizing quantity for this monopoly? (b) Following the concepts of profit maximization, what is the profit maximizing price for this monopoly? (c) Following the concepts of profit maximization, what is the monopoly's profit at the profit maximization point?
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10. A monopoly with the total cost function TC=5Q is facing the demand function Q = 1250-50P. How much can the monopoly increase its profits if it moves from charging a single monopoly price to utilizing a two-part tariff?
George has a monopoly on burrito sales in a small town in Kansas. The burritos cost him a constant $5 each to produce. He faces following demand schedule for his product: Price Quantity Demanded $30 0 $25 1 $20 2 $15 3 $10 4 $5 5 $0 6 Under normal monopoly conditions, how many burritos should he produce, what price should he charge, and how much profit can he expect to make? Draw a graph under these assumptions showing (and calculating) producer surplus, consumer surplus, economic surplus, and deadweight loss. If George could engage in perfect price discrimination, how many burritos would he produce, what would his total revenue be, and how much profit would he earn? Draw a graph under these assumptions showing (and calculating) producer surplus, consumer surplus, economic surplus, and deadweight loss. Is society better off by allowing George to perfectly price discriminate? Defend your answer.