Let’s assume a monopolist has the following inverse demand curve: p = 248 −3q and the following cost curve: T C = 8q + q^2 (a) Calculate the marginal revenue and marginal cost for this firm. (b) Let’s assume the firm chose to operate in a perfectly competitive market. If that was true, what is the equilibrium price and quantity?
E3
Let’s assume a monopolist has the following inverse demand curve:
p = 248 −3q
and the following cost curve:
T C = 8q + q^2
(a) Calculate the marginal revenue and marginal cost for this firm.
(b) Let’s assume the firm chose to operate in a
what is the
(c) Graph the demand curve, marginal revenue, and marginal cost for the perfectly competitive
market. Show the optimal quantity and price on the graph.
(d) Calculate the
(e) Now, let’s assume the firm chose to operate as a monopolist. If that was true, what is the
equilibrium price and quantity?
(f) Graph the demand curve, marginal revenue, and marginal cost for the monopolist market.
Show the optimal quantity and price on the graph.
(g) Calculate the consumer surplus, producer surplus, and deadweight loss in this market.
Step by step
Solved in 5 steps
