Suppose a monopolist's per-period demand curve for a new computer chip is given by p = 100 - 0.25q, and its marginal cost (mc) is $20. (a) What is the per-period value of the innovation to society, v, if the innovation is competitively supplied instead? (b) Calculate per-period consumer surplus, deadweight loss, and monopoly profit. (C) Calculate the (discounted) present value of the patent to the monopolist if -0.05 (or 5%) and n=20 years. Recall that T=[1 − (1/1+r)"]/r. Note: (1/1.05)20=0.38. -

Suppose a monopolist's per-period demand curve for a new computer chip is given by p = 100 - 0.25q, and its marginal cost (mc) is $20. (a) What is the per-period value of the innovation to society, v, if the innovation is competitively supplied instead? (b) Calculate per-period consumer surplus, deadweight loss, and monopoly profit. (C) Calculate the (discounted) present value of the patent to the monopolist if -0.05 (or 5%) and n=20 years. Recall that T=[1 − (1/1+r)"]/r. Note: (1/1.05)20=0.38. -

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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part C D
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Subpart 7
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