How to see elasticity from the demand and supply function? Will this work in a monopoly/oligopoly? E.g. MWTP = 490-0.25Q, MC=2Q-1310 The elasticity for demand is -0.25, and supply is 2? Please explain

How to see elasticity from the demand and supply function? Will this work in a monopoly/oligopoly? E.g. MWTP = 490-0.25Q, MC=2Q-1310 The elasticity for demand is -0.25, and supply is 2? Please explain

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 3. Suppose a company has a fixed cost of 20 and a marginal cost that is constant at 2. The demand curve is P=24-Q. Explain why this is a natural monopoly. Contrast regulation that sets the price at marginal cost with regulation that sets it at average cost. How do the outputs and surpluses differ? Calculate the DWL under average cost pricing. Illustrate outputs, prices, and DWL in a diagram.
Please Answer part f . please draw the complete graph Suppose a monopolist faces demand D = 6 − Q and MR = 6 − 2Q, and has costs T C = 1 + 2Q, and MC = 2. The monopolist is unable to price discriminate. a. Derive the ATC. Is this a natural monopoly and why?. b. Draw the demand curve, MR, MC, ATC on a graph. Make sure to label the curves and axes clearly Calculate the value of the optimal Q and P. Label this on the graph of the previous question (part b). d. Calculate the value of the profit at this point. Also label this on the graph (part b). e. The government’s antitrust division determines this monopoly has too much market power. It has two options: break the monopoly into two smaller companies, or regulate it using a price ceiling. Which should it do and why?. f. The government has decided to enact the price ceiling. On the graph, label the price ceiling that maximizes consumer surplus. Indicate this consumer surplus on the graph (part b).
Suppose a monopoly's price elasticity of demand equals-5 and the marginal cost of production equals $500.00. The profit-maximizing price is $ 625 (Enter a numeric response using a real number rounded to two decimal places.) What will be the firm's markup? When maximizing profit, the monopoly's markup is______percent. (Round your response to the nearest percent.)
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.
Provide an example of a cost function for which a natural monopoly exists. Why might we want to allow natural monopolies to exist (e.g. how might social welfare benefit from such a monopoly)?
Question 1: The following graph contains curves that are faced by a monopolist called SoftMicro. 16 MC 14 AC Im 11 10 9 MR 30 50 80 100 a) What is the profit-maximizing quantity and price for SoftMicro if it is a single-price monopoly? b) What is the monopolist's profit and consumer surplus in part (a)? Give me the letters of the shape of the surpluses. c) What is the price and quantity if the industry is perfectly competitive.
If Google is a monopoly, how would breaking up affect the market price and market quantity? How do we test these hypotheses?
Refer to the graph below: Price and cost (dollars) 0 $ MR MC ATC AVC D 20 40 60 80 100 120 140 160 Quantity The figure shows the demand and cost curves facing a monopoly in the short run. The profit-maximizing level of output is...
Some say a monopoly can charge whatever price it wants. This is not true, explain why? What restricts a monopoly? (government regulation is not the answer here).
The following graph depicts the demand (D), marginal revenue (MR), marginal cost (MC), and average total cost (ATC) curves for a firm operating as a natural monopoly. Costs and Revenues (dollars) 80 70 60 50 40 30 20 10 0 Market for a Natural Monopoly MC Quantity and ATC MR 10 20 30 40 50 60 70 80 90 100 D B ↑ Instructions: Enter your answers as a whole number. a. If the firm is operating as a natural monopoly, what is the profit-maximizing level of output and price charged to consumers? $ units will be sold b. At what price would the firm earn a normal profit? c. Suppose the government regulated the monopoly such that it were required to charge the perfectly competitive price. What is the regulated price?
Homework Unanswered A monopoly is producing where marginal cost is $10,000 and marginal revenue is $15,000 in an industry where demand is above the average cost. Place the following actions in order to describe the steps the monopoly would take to maximize its profits. Drag and drop options into correct order and submit. For keyboard navigation... SHOW MORE III = E The firm realizes that as it increase production, total revenue will go up by more than cost increases. III = ||| The quantity produced will be larger than at the beginning and the price will be lower. = The monopoly will produce more units up to the point where marginal cost equals marginal revenue. The monopoly will make positive economic profits at the new price and quantity. As they increase quantity price is determined by the demand curve. There will be a surplus if the price is too high. Unanswered Submit
Draw an example of a monopoly with a linear demand curve and a constant marginal cost curve. a. Show the profit-maximizing price and output and and identify the areas of consumer surplus, producer surplus, and deadweight loss. Also show the quantity that would be produced if the monopoly were to act like a price taker. b. Now suppose that the demand curve is a smooth concave-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the point Explain why the monopoly equilibrium will be the same as with the linear demand curve. Show how much output the firm would produce if it acted like a price taker. Show how the welfare areas change. c. Repeat the exercises in part b if the demand curve is a smooth convex-to-the-origin curve (whose ends hit the axes) that is tangent to the original demand curve at the point