How can a monopolist maximize its profits? a.) Produce maximum output where marginal cost and price are equal. b.) Finding the output where MR = MC and producing and charging the price corresponding to that output level on the demand curve. c.) Setting the price at the demand curve's highest point and output where MR = MC. d.) Setting the price level where marginal cost is minimized.

How can a monopolist maximize its profits? a.) Produce maximum output where marginal cost and price are equal. b.) Finding the output where MR = MC and producing and charging the price corresponding to that output level on the demand curve. c.) Setting the price at the demand curve's highest point and output where MR = MC. d.) Setting the price level where marginal cost is minimized.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 3QP

See similar textbooks

Similar questions

The inverse demand function in the industry is p(y)=10-2y. The marginal costs are constant and equal 2, the fixed costs are zero. a. If the industry is perfectly competitive, what are the equilibrium output and price? b. If there is a single monopolist in the industry, what are the equilibrium output and price? What is the profit? c. Suppose now that the monopolist can perfectly discriminate all customers and charge different prices. How many units will be sold and what will be the profit? d. Find the deadweight loss due to monopolies in parts b. and c.?
A monopolist has a demand curve given by Q=100-P and a total cost curve given by TC= Q2 + 16. a.Find the monopolist’s profit maximizing quantity and price. Indicate them on the graph. b.How much economic profit will the monopolist earn? c. Calculate the price elasticity of demand at the equilibrium price level.
Hi! I got stuck with my microeconomics homework. Can you please help? Here's the problem: A monopolist knows that in order to expand the quantity of output it produces from 8 to 9 units it must lower the price of its output from $2 to $1. Calculate the quantity effect and the price effect. Use these results to calculate the monopolist’s marginal revenue of producing the 9th unit. The marginal cost of producing the 9th unit is positive. Is it a good idea for the monopolist to produce the 9th unit? It is from Microeconomics: Canadian Edition by Paul Krugman; Robin Wells; Iris Au; Jack Parkinson
2. A monopolist faces the demand curve p=250-2q and its total cost function is given by TC = F + 10q, where F is a non-negative fixed cost. a. Find the profit-maximising price and quantity produced for the monopolist. b. What is the highest value of F that allows the firm to earn profits (of zero or more) rather than losses?
A monopolist has an inverse demand curve given by p(y) =12 − y and a cost curve given by c(y) = 3y. 1. Find the marginal revenue and marginal cost functions.2. Find the optimal price and quantity for the monopolist.3. Find the optimal price and quantity if the market is competitive. Note that in the competitive market firm produce where MC=AC.4. Calculate the consumers surplus and deadweight loss of due to monopoly I need all four parts answered. I would prefer a diagram to accompany part 4.
A monopolist faces the following demand curve and total cost curve for its product: Demand curve: P = 200 - QTotal cost curve: TC = 20Qa. Write the equation for the total revenue function in terms of Q. b. Write the equation for the marginal revenue function. c. What is the marginal cost? d. What is the profit-maximizing quantity for the monopolist? e. What is the profit maximizing price? f. What is the profit for the monopolist as a result?
Please answer the all parts don't leave last part .
Suppose that the monopolist's demand is: P = 8 – Q, and marginal revenue is: MR = 8 – 2Q. - The marginal cost is: MC = 2, and there is no fixed cost. a.Find out the profit maximizing output level. b.Specify the amount of economic profit or loss at the profit maximizing output. c.Calculate the price elasticity of demand at the profit maximizing point and explain it.
A monopolist has a cost function given by c(y) = y2 and faces a demand curve given by P(y) = 120 − y. a. What is his profit-maximizing level of output? What price will the monopolist charge? b. Suppose you put a lump sum tax of $100 on this monopolist. What would its output be? c. If you wanted to choose a price ceiling for this monopolist so as to maximize consumer plus producer surplus, what price ceiling should you choose? How much output will the monopolist produce at this price ceiling?
A monopolist faces the demand curve Q(P ) = 50 − P 2 . The firm can produce output with marginal costs MC(Q) = Q and no fixed costs. Hint for the following questions: if revenue is of the form R(Q) = (a − bQ)Q, then the derivative of revenue is a − 2bQ. (a) What is the profit maximizing price for the monopolist in this market? (b) What is the deadweight loss from monopoly in this market, compared to the efficient output that sets price equal to marginal cost? *Please fully explain out any math
A monopolist faces a market demand curve given by Q = 70 – P. The Monopolist’s marginal revenue function is given by: MR = 70 - 2Q. a. If the monopolist can produce at constant average and marginal costs of AC = MC = 6, i. What output level will the monopolist choose in order to maximize profits? ii. What is the price at this output level? iii. What are the monopolist’s profits? Show all working and draw graph
A monopolist can produce at a constant marginal cost of $5 and a fixed cost of $55. It faces a market demand curve given by Q = 24- P/4.a. Calculate the profit-maximizing price and quantity for thismonopolist. Also, calculate its profits. b. Suppose a competitive firm has the same constant marginal cost of £5. Find the profit maximising output for this firm. What is the price that the competitive firm must charge? c. The government decides to impose a new policy on this monopolist. In particular, the government wants to introduce price regulation such that the regulated price will consequently make this monopolist earns zero profit only. What is the regulated price that this monopolist should charge? How many quantities of output are produced with this new regulated price?