ONLY DO QUESTION E. EVERYTHING ELSE HAS ALREADY BEEN SOLVED. 1. A monopoly firm holding a patent right faces a market demand given in the table. Wec. Draw demand, MR and MC curves on the same graph. (Note: This question does notassume there is no fixed costs and the monopolist maximizes profit.carry any points, because the graph is drawn for you as below. You can use it directlyto answer the following questions.)ΔTCYou may want to construct columnsΔQΔTRa. Fill in the blanks. [Hint: MR =MCP=AQfor AQ, ATR, and ATC to find MR and MC.]26TRMRTCMCProfit20306001624083601840720123208400MC165080084008400146084044808360MRD12708405608280b. From the table above, what is the price the monopoly firm would choose?d. Calculate the monopoly firm's optimal price and quantity using the given functions.Answer: 16$Answer:Optimal price: $17From now on, we will use the function forms of the previous table:Quantity: 45 unitsDemand: P = 26 - QMarginal Revenue: MR = 26 -Qe. Show CS, PS, and DWL on your graph in part c. Calculate the exact size of CS, PS, TS,and DWL.Marginal Cost: MC = 8

(e.) Monopoly: - monopoly market structure is the structure in which there is only one seller of any…

PI 26 MC D MR d. Calculate the monopoly firm's optimal price and quantity using the given functions. Answer: Optimal price: $17 Quantity: 45 units e. Show CS, PS, and DWL on your graph in part c. Calculate the exact size of CS, PS, TS, and DWL.

PI 26 MC D MR d. Calculate the monopoly firm's optimal price and quantity using the given functions. Answer: Optimal price: $17 Quantity: 45 units e. Show CS, PS, and DWL on your graph in part c. Calculate the exact size of CS, PS, TS, and DWL.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

ONLY DO QUESTION E. EVERYTHING ELSE HAS ALREADY BEEN SOLVED.

1. A monopoly firm holding a patent right faces a market demand given in the table. We
c. Draw demand, MR and MC curves on the same graph. (Note: This question does not
assume there is no fixed costs and the monopolist maximizes profit.
carry any points, because the graph is drawn for you as below. You can use it directly
to answer the following questions.)
ΔTC
You may want to construct columns
ΔQ
ΔTR
a. Fill in the blanks. [Hint: MR =
MC
P
=
AQ
for AQ, ATR, and ATC to find MR and MC.]
26
TR
MR
TC
MC
Profit
20
30
600
16
240
8
360
18
40
720
12
320
8
400
MC
16
50
800
8
400
8
400
14
60
840
4
480
8
360
MR
D
12
70
840
560
8
280
b. From the table above, what is the price the monopoly firm would choose?
d. Calculate the monopoly firm's optimal price and quantity using the given functions.
Answer: 16$
Answer:
Optimal price: $17
From now on, we will use the function forms of the previous table:
Quantity: 45 units
Demand: P = 26 - Q
Marginal Revenue: MR = 26 -Q
e. Show CS, PS, and DWL on your graph in part c. Calculate the exact size of CS, PS, TS,
and DWL.
Marginal Cost: MC = 8

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