Problem 3Suppose that a monopolistic seller of flux capacitors faces the inverse demand curveP = 40 -and that the monopolist can produce flux capacitors at a constant marginal and averagetotal cost of $5.(a) How many units will an unregulated monopolist sell?1(b) Suppose that the government imposes a price ceiling of $6. Find the firm's marginalrevenue of the 10th, the 68th, and the 69th unit.(c) How many units will a profit-maximizing monopolist sell when the price ceiling is inplace? At what price?(d) Show in a graph the deadweight loss of unregulated monopoly and the deadweightlosses with the price ceiling. Does the price ceiling improve social welfare?

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Suppose that a monopolistic seller of flux capacitors faces the inverse demand curve P = 40 - and that the monopolist can produce flux capacitors at a constant marginal and average total cost of $5. (a) How many units will an unregulated monopolist sell? 1

Suppose that a monopolistic seller of flux capacitors faces the inverse demand curve P = 40 - and that the monopolist can produce flux capacitors at a constant marginal and average total cost of $5. (a) How many units will an unregulated monopolist sell? 1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How do perfectly competitive firms, monopolists, monopolistically competitive firms, and cartels choose the profit -maximizing quantity? A) The quantity at which average total cost is minimizedB) The quantity at which total revenue and total cost are equalC) The quantity at which total revenue is maximizedD) The quantity at which marginal revenue and marginal cost are equal
4) A monopolist faces a market inverse demand function: P = 250 – 5Q and marginal cost function: ATC = MC = 10. Answer the following. If the monopolist employs a single price strategy, what is the optimal quantity produced and price charged. What is the market up and contribution margin from the strategy in part a if Ed = -1.0833. If other firms trying to enter this market had slightly higher cost structures, what would be a good price & quantity mix to limit entry of competition and why (no math needed). If the monopolist could create a bundled good instead of the strategy in part a, what price would it charge and how many units would be sold in the bundle. What are the profits from part a & part d? Which pricing strategy is preferred. EC: Briefly explain why a firm that offers a buy 2 get the 3rd free deal, does not just offer that same product at a 33.33% discount of the normal stated price. Need help with number 2.
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33) Kate's Great Crete (KGC) is a local monopolist of ready-mix concrete. Its annual demand function is Q=20,000 - 400P, where P is the price, in dollars, of a cubic yard of concrete and Q is the number of cubic yards sold per year. What is the difference between price and marginal revenue when KGC sells 5,000 cubic years of concrete per year? A) $12.50 B) $25.00 C) $37.50 D) $50.00
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Dollars P3 P₂ P4 0 P3 P2 MC P1 P4 ATC Refer to the above diagram for a pure monopolist. Suppose a regulatory commission is created to determine a legal price for the monopoly. If the commission seeks to provide the monopolist with a "fair return," it will set price at: D Q3 Q₁ Q₂ Quantity Q1 Q2 MR
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