Suppose Inverse market demand is given as P = 110 – 20. Market%3Dsupply is given as Q = 10 + P. Also assume ATC =0.25*Q.How many units of the product would the perfectlycompetitive market supply? What would the equilibrium price be?a.What is the profit maximizing price and quantity if this marketis a monopoly? Calculate the profit of the monopoly.b.Calculate the deadweight loss created and consumer surpluswhen this market became a monopoly.C.

Answer: Given, Market demand: P= 110 - 2Q Market supply: Q = 10 + P or P = Q - 10 ATC = 0.25*Q (a).…

Suppose Inverse market demand is given as P = 110 - 2Q. Market supply is given as Q = 10 + P. Also assume ATC = %3D 0.25*Q. How many units of the product would the perfectly competitive market supply? What would the equilibrium price be? a. b. What is the profit maximizing price and quantity if this market is a monopoly? Calculate the profit of the monopoly. Calculate the deadweight loss created and consumer surplus when this market became a monopoly. C.

Suppose Inverse market demand is given as P = 110 - 2Q. Market supply is given as Q = 10 + P. Also assume ATC = %3D 0.25*Q. How many units of the product would the perfectly competitive market supply? What would the equilibrium price be? a. b. What is the profit maximizing price and quantity if this market is a monopoly? Calculate the profit of the monopoly. Calculate the deadweight loss created and consumer surplus when this market became a monopoly. C.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Monopoly

Section15.3: The Welfare Cost Of Monopolies

Problem 3QQ

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