QUESTION 3 You are the manager of a monopoly that faces a demand curve described by P= 230 – 20Q. Your costs are C = 5 + 30Q. - Instructions: Round up your answers to no decimals. Do not round values to complete other calculations. The profit-maximizing output for your firm is: The profit-maximizing price for your firm is: Profits =

QUESTION 3 You are the manager of a monopoly that faces a demand curve described by P= 230 – 20Q. Your costs are C = 5 + 30Q. - Instructions: Round up your answers to no decimals. Do not round values to complete other calculations. The profit-maximizing output for your firm is: The profit-maximizing price for your firm is: Profits =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Onestore has monopoly power in Smalltown. Assume that Onestore is a profit maximizing firm and currently operates at a negative economic profit in the short run.(a) Draw a correctly labelled diagram for Onestore and show each of the following:(i) The profit maximizing price and quantity labelled as Pm and Qm respectively (ii) Shade completely, the area representing the negative economic profit (b) Explain why Onestore continues to operate in the short run despite earning negative economic profit in the short run. c. A single price monopolist’s demand curve is given by:P = 240 – 3qand its total cost curve is given byTC = 30 + 6q Calculate the monopolist’s profit maximizing level of output Calculate the profit maximizing price for the monopolist What is the profit of the monopolist?
ou are the manager of a bakery that produces and packages bran buns. The bakery is a local monopoly. According to new research, a typical consumer’s daily inverse demand function for your bran buns is P=2−0.25Q. Your cost function of producing bran buns is C(Q)=Q. a) Suppose your firm sells buns charging one per-unit price. Find the profit-maximising per-unit price, quantity of buns purchased by a typical consumer daily and the firm's profits. b) To boost the bakery's profits you decide to sell buns in a package of several units. Determine the optimal number of bran buns to sell in a single package and the optimum package price. Find profits the bakery earns.
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