Do not use chatgpt. question #19:Suppose that a monopolistic seller of flux capacitors faces the inverse demand curve P = 40 -0.5Q, and that the monopolist can produce flux capacitors at a constant marginal cost of $5.A) How many units will an unregulated monopolist sell?B) Suppose that the government imposes a price ceiling of $6. What does this price ceilingdo to the monopolist's marginal revenue curve? Specifically, what is the marginal revenue ofthe 10th unit? The 68th unit? How about the 69th unit?C) How many units will a profit maximizing monopolist sell when the price ceiling is in place?At what price?D) Compare the deadweight loss of unregulated monopoly to the deadweight losses withthe price ceiling. Does the price ceiling improve social welfare?

A) At what level will an unregulated monopolist produce? Thus, the profit maximization for an…

Answered: question #19: Suppose that a…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Antitrust And Regulation

Section: Chapter Questions

Problem 10SQP

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Q1) Suppose that the inverse demand for a product is represented by the equation P = 50 – Q, where P is the price in Euros and Q is the annual output. Suppose that only one firm produces this product and that the marginal and average cost is €10. Calculate the profit-maximising price for this monopolist. Q2) In autumn, Erling Kagge, who lives alone on an island near the North Pole, puts 50 bags of root vegetables from his harvest into a cave just before a family of polar bears goes in to hibernate. The polar bears do not eat vegetables but would attack Kagge if he approached them. As a result, he is unable to get the vegetables out before the polar bears emerge the following spring. The vegetables spoil at the same rate no matter where he stores them. Which of the following statements best describes this behaviour? A. Kagge’s behaviour is an example of the anchoring effect in action B. Kagge’s behaviour is an example of the framing effect in action C. Kagge’s…
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Question 4 Consider a monopolist facing two consumers with the following two inverse demand functions: P=200-4Q₁ and P=122- 6Q2. Assume that fixed costs are zero and that the marginal cost is equal to $8. a) Suppose the monopolist can differentiate between the two consumers. The monopolist decides to use a two- part tariff that permits both consumers to stay in the market. Solve for each consumer's demand, fixed fee and monopolist profits. b) Assume the monopolist cannot differentiate between the two consumers and hence cannot apply a two-part tariff. decides to serve both consumers. Solve for the equilibrium aggregate demand and price in market, demand of each consumer and the monopolist profit. c) Now assume the monopolist decides not to serve the low demand consumer. Solve for price, demand and monopolist profits. Is the monopolist better off as a result of eliminating the low-volume consumer from the market?

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