Costs & Revenue INELASTIC MARKET ELASTIC MARKET COMBINED MARKET X2 X1 P2 P1 AR Y1 -MC = ATC Y2 MC . MC1 --- MC2 AR AR MR MR Output Q1 Q2 Copyright: www.economicsonline.co.uk MR a) Looking from the price perspective what kind of monopoly is presented cumulatively in all three diagrams? b) explain what are the diagrams are explaining? Support them with the example of your choice.

Costs & Revenue INELASTIC MARKET ELASTIC MARKET COMBINED MARKET X2 X1 P2 P1 AR Y1 -MC = ATC Y2 MC . MC1 --- MC2 AR AR MR MR Output Q1 Q2 Copyright: www.economicsonline.co.uk MR a) Looking from the price perspective what kind of monopoly is presented cumulatively in all three diagrams? b) explain what are the diagrams are explaining? Support them with the example of your choice.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Subject: economics
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Pete has developed a new virtual reality headset that is so far advanced he effectively has a monopoly. His marginal cost is a constant $200, and his inverse demand is P = 800 – 4Q. What is the deadweight loss in this monopoly? a.) $0 b.) $45,000 c.) $11,250 d.) $22,500 Give typing answer with explanation and conclusion
12. You’ve been hired as a consultant by a monopoly. You discover that the demand curve facing the monopoly is given by P = 80-Q and MC = 3Q. The firm is currently charging a price of $60. Using this information and a carefully drawn and labeled diagram and assuming that the firm should remain open, explain what the firm should do and why.
Can you help with parts d,e, and f please? Assume the following equations describe the conditions for a monopoly: Qd = 2,000 - 100P TC = 3,500 + 5q + .005q2 Where Qd is the quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions:a. What is the firm's equation for total revenue expressed as a function of quantity? b. What is the firm's equation for marginal revenue expressed as a function of quantity? What is the firm's equation for marginal cost expressed as a function of quantity? c. What is the firm's profit maximizing quantity of output? d. What price will the firm charge for the commodity? e. What would be the socially optimal quantity of output? f. What price would regulators have to establish in order to have the firm produce the socially optimal quantity of output?
Question 5 The following figure describes the market demand curve of a monopoly market: 10 Price, cost 9 8 7 6 3 2 1 a. b. C. d. 5 10 15 20 25 30 35 D a). 45 50 55 60 65 70 75 80 85 quantity Draw the marginal revenue (MR) curve for the monopoly given the above market demand curve. If the monopoly firm can produce any output level with the extra cost $3 per unit, how would the marginal cost (MC) curve be? List the mathematical equation and draw the MC curve on the same figure of question The fixed cost for the monopoly company is $25. Find the optimal output level and the related profit/loss for it. There are two proposals concerning the market efficiency: Plan A: regulate the market price at $4. Plan B: allow and help the monopoly enforce the perfect price discrimination. If you represent consumers to vote for one plan, which one would you choose? Explain with proper calculation (Hint: consumers only care about their welfare).
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1750 1500 1250 1000 750 500 250 0 1200 3600 6000 8400 The figure above shows demand and marginal revenue for a single price monopoly. At any price above $ demand is elastic. Assume production costs are constant and equal to $750.00 (i.e., AC = MC = $750). 1) Output is units per day at a price of $ per unit. 2) Profit is $ 3) Consumer surplus is $ 4) If this market was perfectly competitive, output would exceed the single-price monopoly output by Time units.