Suppose a per unit tax is imposed on monopolists a.) How does this affect output price? b.) how are profits affected? c.)Whjat can you say about the burden of the tax-who bears it?
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Suppose a per unit tax is imposed on monopolists
a.) How does this affect output price?
b.) how are profits affected?
c.)Whjat can you say about the burden of the tax-who bears it?
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- 3. Assume inverse demand function for game console in an imaginary country is P=1200-4Q and the total cost function is TC=400+4Q². Government put $120 of specific tax on production. a. If the market is competitive what is the incidence of tax on consumer? b. If the market is monopolist what is the incidence of tax on consumer?1. Refer to the figure below when the firm is a monopolist. Price P MC L K J ATC D T W Quaxtity \MR a) If the monopolist maximizes profit, how many units will it produce? b) What price will the monopolist charge? c) What area measure the monopolist's profit? d) What level of output would be socially efficient? 2. A Monopolist is facing a demand schedule that is shown in the following table. Quantity Total Revenue Average Revenue Marginal Revenue Price $35 $32 1 2 3 $29 14 $26 15 $23 $20 $17 $14 6 7 18 19 $11 10 $8 a) Fill out the rest of the table. b) Assume this monopolist's marginal cost is constant at $11. What quantity of output (Q) will it produce and what price (P) will it charge? ------Suppose that a monopolist’s demand curve is given by P(y) = 28−3y and its marginal cost is given by MC(y) = y, where y denotes output.a. Find the profit-maximizing quantity and price for this monopolist. Illustrate your answer with a graph.b. Calculate the consumer surplus, producer surplus and thedeadweight loss of this monopoly. (You may find it helpful to refer tothe graph you drew for part a.)c. Carefully explain why a monopoly creates a deadweight loss.
- 1 Suppose that a monopolist has a patent for widgets and the market demand curve Q(P) is:Q(P) = 60 – 2P,where P is the price in dollars and Q is quantity. a. Solve for the inverse demand P(Q) curve by solving the demand curve for P in terms of Q. b. Using your answer from (a), express the monopolist’s total revenue in terms of Q as TR(Q) = QP(Q). c. Calculate the monopolist’s marginal revenue MR(Q) by differentiating the total revenue you found in theprevious step: MR(Q) = dTR(Q) / dQ. PLEASE SHOW ALL WORKWhich of the following statements is not correct? Select one: A single price monopolist is more efficient than perfectly competitive market because it makes a larger profit. a. O b. A single price monopolist produces less than the competitive market. O c. A single price monopolist charges more than the competitive market. d. A single price monopolist faces a downward sloping demand curve. A single price monopolist increases produces surplus at the expense of e. consumer surplus.2.) Monopolist with tax: Suppose the firm faces the following inverse demand function and total cost function P=a-BQ TC=7Q+8+10 where is the per unit tax. Compute for the level of Q that maximizes profit for the firm. What restriction(s) on the parameters will ensure production of positive quantity?
- A monopolist is faced with the following cost and revenue curves:(picture) a.What is the maximum-profit price and output,total revenue, total cost and profit? b.If the monopolist were ordered to produce 300 units, what would be the market price and how much profit would now be made c.If the monopolist were faced with the same demand, but average costs were constant at £60 per unit, what output would maximise profit? What would be the price now?................................................................................................. (j) How much profit would now be made? ................................................................................... (k) Assume now that the monopolist decides not to maximise profits, but instead sets a price of £40. How much will now be sold? .................................................................................................................................................. (l) What is the marginal revenue at this…a) True or False and Explain: A profit maximizing monopolist has no limit to how high they set the price. b) True of False and explain: When there are economies of scale in production it is possible for a competitive market to sustain the competitive equilibrium. c) When there are economies of scale in production, why is it beneficial to have only one producer?Figure: Demand Elasticity Price MR D Quantity Monopoly A Price MR D Quantity Monopoly B
- The diagram at right shows the demand curve, marginal revenue curve, and cost curves for a single-price monopolist that owns the only golf courses on Eagle Island. The monopolist's product is 18-hole golf games. a. Now suppose the monopolist is able to charge a different price on each different unit sold. What would be the total number of rounds of golf sold per week? rounds. (Round your response to the The total number of rounds sold per week is 600 nearest whole number) What would be the price on the last round sold? The price on the last round sold is $200 (Round your response to the nearest dollar) b. What is the value of the consumer surplus if the monopolist cannot price discriminate at all? The value of the consumer surplus is $ 40000 (Round your response to the nearest dollar) c. What is the value of the consumer surplus when the monopolist is practicing this "perfect price discrimination? The value of the consumer surplus is $ (Round your response to the nearest dollar) Price…. Suppose a monopolist producing Q units of output faces the demand curve P = 130 − 4Q. Its total cost when producing Q units of output is T C(Q) = F + 34Q+ 2Q2 , where F is a fixed cost. (a) For what values of F can a profit-maximizing firm charging a uniform price earn at least zero economic profit? (b) For what values of F can a profit-maximizing firm engaging in perfect first-degree price discrimination earn at least zero economic profit.A monopoly is forced to pay higher taxes to help their government lower their debt. Even with this tax, the monopoly still earns a positive economic profit. This new tax will cause: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the monopoly's profits to fall slightly because most of the burden of the tax will fall on consumers. the monopoly's profits to fall significantly because most of the burden of the tax will fall on the monopoly and not consumers.. c the monopoly to increase its price by more than the amount of the new tax. d the monopoly to increase its price by less than the amount of the new tax. the monopoly to increase its price by an amount equal to the size of the new tax.