**Monopolistic Firm Analysis**This section explores key concepts and questions related to monopolistic firms:1. **Profit Maximization**: - **Demand Equation**: $ p = 200 - 0.25Q $ - **Marginal Revenue (MR) Equation**: $ MR = 200 - 0.5Q $ - **Marginal Cost (MC)**: MC = 20 - **Question**: How much should the firm produce to maximize its profit?2. **Optimal Pricing**: - Using the same demand and MR equations, along with the MC: - **Question**: How much should the firm charge?3. **Profit Calculation**: - With the variables given: - **Question**: Calculate the firm's maximizing profit.These questions guide the evaluation of production levels, pricing strategies, and profit analysis for firms operating within a monopolistic market structure.

here we calculate the profit maximizing , Quantity and Price by using the given information which…

for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much it should produce to maximize its profit? for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much the firm should charge? for a monopolistic firm, its demands is p=200-

for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much it should produce to maximize its profit? for a monopolistic firm, its demands is p=200- 0.25Q while MR =200-0.5Q if its MC=20 how much the firm should charge? for a monopolistic firm, its demands is p=200-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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£/unit 100 90 SRMC 80 70 60 50 40 30 SRAC 20 D= AR 10 MR 20 60 80 100 Units 10 30 40 50 70 90 Figure 12 Demand and cost curves for a firm in monopolistic competition Figure 12 shows the demand curve, D, marginal revenue curve, MR, and short run marginal cost (SRMC) and average cost (SRAC) curves for a firm in monopolistic competition. Using Figure 12, determine the maximum level of profit the firm can make £
The accompanying graph depicts average total cost (ATC) marginal cost (MC), marginal revenue (M), and demand (D) 50 facing a monopolistically competitive firm MC 45 Place point A at the firm's profit maximizing price and quantity 40 35 What is the firm's total cost? ATC 30 25 total cost: 20 15 What is the firm's total revenue? 10 5 total revenue: $ MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity What is the firm's total profit? profit: $ Price and Cost ($)
If the price is greater than Actual total cost, does the monopolistic firm makes a profit, loss, or break-even?
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Exercise 3.8. Dayna's Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C = 100 - 5Q + Q², and demand is P = 55 - 2Q. a) What price should DD set to maximize profit? What output does the firm produce? How much profit and consumer surplus does DD generate? b) What would output be if DD acted like a perfect competitor and set MC = P? What profit and consumer surplus would then be generated? c) What is the deadweight loss from monopoly power in part (a)? d) Suppose the government, concerned about the high price of doorstops, sets a maximum price at $27. How does this affect price, quantity, consumer surplus, and DD's profit? What is the resulting deadweight loss? e) Now suppose the government sets the maximum price at $23. How does this decision affect price, quantity, consumer surplus, DD's profit, and deadweight loss? f) Finally, consider a maximum price of $12. What will this do to quantity, consumer surplus, profit, and deadweight loss?
Why is it that monopolies can enjoy long run profits, but firms under monopolistic competition face a zero-profit long run equilibrium?
a) Can the threat of a price war deter entry by potential competitors? What actions might a firm take to make this threat credible? b)Why is the firm’s demand curve flatter than the total market demand curve in monopolistic competition? Suppose a monopolistically competitive firm is making a profit in the short run. What will happen to its demand curve in the long run?
If the price is less than actual total cost for a monopolistic competitive firm, does the firm make a profit, loss, or break-even?
Suppose that a firm produces wooden train engines in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve: Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm, Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost.
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Suppose that a firm produces polo shirts in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with that cost.
If a firm sets its output in the short run such that marginal revenue, marginal cost and average total cost are equal, then profits are the firm is monopolistically competitive. if the firm is perfectly competitive and profits are if zero; positive zero ; zero positive ; zero positive ; positive