Price ($) Quantity 20.00 1 18.00 2 16.00 3 14.00 4 12.00 5 10.00 6 8.00 7 A.Refer to the above Table. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $4 per unit of providing the product, then how much price should the monopoly charge and how many units should it sell, in order to maximize its profits? Explain.

Price ($) Quantity 20.00 1 18.00 2 16.00 3 14.00 4 12.00 5 10.00 6 8.00 7 A.Refer to the above Table. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $4 per unit of providing the product, then how much price should the monopoly charge and how many units should it sell, in order to maximize its profits? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Confused and not sure how to solve correctly
Figure 3. P, Costs 20 15 50 40 30 30 40 45 MR D MC ATC Q
Everything else held constant a change in workers' expectations about inflation will cause to change. Select one: O a the production function b. aggregate demand Oc short-run aggregate supply O d.long-run aggregate supply
Give the perfect answer in 10 minutesread question carefully
A country that ends a 22-year old state monopoly in telecoms. The phone services market in this country is illustrated by the following equations: Demand: p = 80−q MC: p=−40+2q 1.Draw the the demand, the MR and the MC of the monopolist in the following graph. 2.Suppose a state monopoly on the phone services market. In this case, indicate the price paid by consumers and the quantity exchanged, and calculate the welfare loss compared to the optimal situation. 3.Now consider the situation after the abolition of the state monopoly. With the phone services market now competitive, the state is losing customers, and therefore also losing revenue as a result of new companies entering the market. To compensate for the drop in revenue, the government decides to impose an excise tax of $30 on the phone services market. In this case, indicate the price paid by consumers and the quantity exchanged, and calculate the welfare loss compared to the optimal situation. 4.Give an economic…
Suppose a monopoly firm has the following Cost and Demand functions: TC=Q2 P=80-Q MC=2Q MR=80-2Q Carefully explain what the firm is doing and why. Find the firm’s Profit maximizing Q Find the firm’s Profit maximizing P. Find the firm’s Profit. Suppose because of an advertising campaign, which costs $500, the monopoly’s demand curve is: P=100-Q so its MR= 100-2Q. MC=2Q Looking closely at the TC function and the demand curve, explain the effects of the advertising campaign on the equations compared with the equations above in part 1. Find the firm’s Profit maximizing Q Find the firm’s Profit maximizing P. Find the firm’s Profit. Was the advertising campaign successful? Compare 2 w/ 1. Why?
Suppose a monopoly's price elasticity of demand equals -2 and the marginal cost of production equals $400.00. The profit-maximizing price is $ (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.) 20 Mact 80 F1 F2 F3 F4 F5 F6 F7 @ 23 $ & 1 3 4 7 8 Q W E R Y
Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit, where the marginal revenue of the 250th unit is $40, the marginal cost of the 250th unit is $50, and the average total cost at 250 units is $60. [Hint: Based on the information given, is the quantity you’re asked to show the profit-maximizing quantity? Think about what has to be true for profit-maximization.] Based on the graph and assuming the firm attempts to profit maximize (and succeeds), what would happen to price, quantity, MR, MC, and ATC? (rise, fall, or stay the same?)
Rent seeking The following graph shows the demand, marginal revenue, and marginal cost curves for a single-price monopolist that produces a drug that helps relieve arthritis pain. Place the grey point (star symbol) in the appropriate location on the graph to indicate the monopoly outcome such that the dashed lines reveal the profit-maximizing price and quantity of a single-price monopolist. Then, use the green rectangle (triangle symbols) to show the profits earned by the monopolist. table 1 Suppose that should the patent on this particular drug expire, the market would become perfectly competitive, with new firms immediately entering the market with essentially identical products. Further suppose that in this case the original firm will hire lobbyists and make donations to several key politicians to extend its patent for one more year. The firm is prepared to spend up to $_____ million to extend its patent.
Which of the following is least like monopoly? Sony Corporation A natural gas utility company A cable tv company An electric utility company
Dog
The accompanying graph depicts the marginal revenue (MR), demand (D), and marginal cost (MC) curves for a monopoly a. Place point Pi at the profit maximizing price and quantitvy assuming that the monopolist can only charge a single price. 100 95 90 85 80 75 70 65 2 60 b. What are the profits of the firm if it charges a single price? 50 45 Suppose the monopolist able to successfully price discriminate between two groups by charging one group $60 and charging $35 to the other group. c. What are the firm's profits if it charges the two prices as mentioned above? 35 30 25 20 15 10 MR 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95100 Quantity