Suppose that the monopolist can produce with total cost: TC = goods in two different markets separated by some distance. The demand curves in the first market an second market are given by Q1 20Q. Assume that the monopolist se 240 4P, and Q2 = 360 2P,. If the monopolist can maintai %3D separation between the two markets, what price levels will prevail in each market, respectively? P1 = 60, P2 = 90 %3D O P, = 50, P, = 110 %3D P1 = 80, P2 = 160 P1 = 40, P2 = 100 %3D
Q: Explain all three Circular flow economic models in one structure. ?
A: An economic model is a simplified depiction of reality that enables economic action to be observed, ...
Q: Consider the following payoff matrix, where the first entry in each cell is the row-player's payoff....
A: Introduction In payoff matrix each player choose best strategy so that he can get maximum payoff. It...
Q: t prices to cover the higher costs associated with the new stadium. If the Oilers are prof costs fro...
A: Pricing strategies are the technique involved by the sellers to lay out best cost for their item or ...
Q: What are the effects of a decrease in the price level? Select one: O a. The real interest rate decre...
A: In an economy, any change in inflation or price level will lead to change the value of the currency ...
Q: Consider a monopoly with the following marginal cost and demand curves: MC = 2Q + 200, p = 2,600 – 2...
A: For first price discrimination, the monopoly firm is able to charge prices equals to the consumers w...
Q: Assume at the level of output where MC=MR, a firm experiences TR = $40,000 per week, TFC = $100,000 ...
A: Firm uses condition MC=MR It refers that firm is maximizing profit Given information TR=$40000 TFC=1...
Q: What is your insight about poverty?
A: In economics, poverty is one of the concepts to study when analyzing the overall functioning of the ...
Q: 5. Comerica's Balance Sheet information is given in the table below Assets Liabilities Reserves - $7...
A: In the mentioned question we have to calculate the excess reserve.
Q: e the following graph for a competitive market to answer the question below. The horizontal axis lis...
A: A price floor to be binding always set below the equilbirum price. The equilibrium price is where De...
Q: The price rose. How would it shift the AD curve: Leftward, Rightward or No shift?
A: Aggregate demand refers to the total amount of goods demanded in an economy by all the consumers dur...
Q: Consider a simple economy that only produces: pencils, t-shirts, and bananas. Using the information ...
A: Inflation: Inflation is an economic concept that is defined as a rise in the general price level of ...
Q: What is the short run Supply Curve for a competitive firm?
A: In perfect competition, the short-run supply curve is the marginal cost curve (MC) at and below the ...
Q: Problem 4: A cutting-edge product of Continental Fan had the following net cash flow series during i...
A: The internal rate of return (IRR) calculates the time value of money. When you calculate the rate o...
Q: 2. May purchased a new mobile phone and paid ₱10,000. This means that her marginal utility from this...
A: In a market, marginal utility refers to the amount of satisfaction gained by a consumer when he cons...
Q: Suppose we have a duopoly with a market demand curve P-100-1.5Q. Firm A has TCA=25+2qA while Firm B ...
A:
Q: Suppose there are only two goods - Food (F) and Shelter (S). The demand equations for these two good...
A:
Q: Answer the following questions about country A. a) What was GDP equal? b) What was the value o...
A: Calculation is as follows:
Q: Has trade deficit impacted the U.S. economic growth?
A: In international trade, different countries of the world import and export goods and services from e...
Q: Ed is a substitute lecturer. Every day he chooses between how many hours to work (denoted by L) and ...
A:
Q: A 5-year bond with a yield of 6% (continuously compounded), with a face value of $100, pays an 3% co...
A: Bond Price = C(1-(1+r)-n/r ) + F/(1+r)n Here, C = Coupon payment = 3 F = Face value = 100 r = 6% = 0...
Q: What is Marginal Revenue equal to for a firm in a competitive market?
A: The revenue that results when there is an increase in revenue from the sale of one additional output...
Q: Would you consider globalization as a boon or bane?
A: Some arguments are for and some arguments are against the globalisation . Following are the reason ....
Q: A technology firm has determined that their lowest total cost production technology is $880. If mach...
A: The lowest total cost of production technology is $880 The machines cost is $100 The company has det...
Q: Equipment costing $20,000 that is a MACRS 5-year property is disposed of during the second year for ...
A: Introduction Cost of equipment is $20,000. Its MACRS is 5 years. But it is disposed during the secon...
Q: Which shock can the Fed deal with most effectively? a shock to the LRAS curve a major oil shock a sh...
A:
Q: À firm that sells two goods (good 1 and good 2) has four potential customers with the reservation pr...
A: (A) As given the firm production cost is zero, profit maximizing firm will charge a price that is eq...
Q: A toy manufacturer's cost for producing q units of a game is given by C(a) - 1450 +3.6g+ 0.0006g. If...
A: p=8.6-1440qTR=pq =(8.6-1440q)q =8.6q-0.002q2MR=8.6-0.002qc=1450+3.6q+0.0006q2MC=3.6+0.0012qπ=T...
Q: Question 20 Use the following graph to answer questions 20–25. For the graph...
A: Question 20 The answer is - d) None of the above represents a change in the quantity demanded with a...
Q: 3. A person invests 4,500 in the hopes of receiving a return in eight years. What amount, in pesos, ...
A: The value of an item at a future period is called future worth or future value.It is basically the p...
Q: If the marginal revenue is 45 and the marginal cost is 45 also. What can you say about the firm's pr...
A: Profit maximization is the process through which corporations and organizations devise methods to in...
Q: 1. Suppose the government mandates a 3-year licensure for contractors and bans working on your own h...
A: Note: We will answer the first question as the exact one was not specified. Please resubmit the new ...
Q: What is the definition of equal product curves in microeconomics? Mention the important applications...
A:
Q: 2. Consider the money market model. Suppose that the current price is higher than the equilibrium pr...
A: In a market, the price level explains the market value of a specfiic good, services or any other ass...
Q: When it comes to getting a college education, most people consider not O their self-interest; the so...
A: Externality refers to spill-over effect of a good or service on the society.
Q: What is the after-tax present worth of a chip placer if it costs $75,000 and saves $23,000 per year?...
A: Let's solve it step by step:- The tax rate is 54% thus, calculating it by considering it at every po...
Q: In the evolution of the state of despotic....what is the mode of production
A: Despotic state refers to when the individual holds all the power. In economics, it refers to when go...
Q: Consider the Swan-Solow model of economic growth. [Hint: Question (e) below goes beyond the subjec...
A: The units of production method are based on a resource's utilization, activity, or units of goods pr...
Q: Flow 1 Flow 2 A Flow 3 B Flow 4 Refer to the diagram. (There are a couple of lines missing. It shoul...
A: The correct option is A.
Q: 5. Suppose that people’s preference for consumption fell. How would this change the aggregate demand...
A: The aggregate demand curve refers to the different quantities are demanded at the different price le...
Q: The key characteristic of financial intermediaries is that they Select one: O a. are always liquid. ...
A: The answer is - b. Will lend to anyone
Q: Your company borrows $800,000 and will pay it back at 10% APR of real interest compounded monthly. T...
A: Amount borrowed = $800,000 Interest rate = 10% Adjustment for inflation would be 4% Payment would be...
Q: Consider a potential fiscal policy used to curb a recession. How could a consumer and business expec...
A: Fiscal policy refers to the policy of the government to control the money supply in the economy to m...
Q: Assume that there are two firms in a market with inverse demand function P(Q) = 120-Q. Both firms ha...
A: Consumer surplus means a situation in which the willing to pay price by the consumer is higher than ...
Q: The IS relation means that the output increase leads to an interest rate decrease. TRUE or FALSE? ...
A: IS curve denotes the relationship between interest rate and output level in the economy.
Q: Avocado has received a special order for 2,400 units of its product at a special price. The product ...
A: Solution- Avocado has received a special order for 2,400 units of its product at a special price. Th...
Q: The following items describe the responses of four individuals to a Bureau of Labor Statistics (BLS)...
A: The natural rate of unemployment includes both frictional and structural unemployment. Frictional un...
Q: Given all the information in the table please refer and give me answer All Numbers are in S Billion ...
A: At an output level of $1600, consumer spending is $1300, investment spending is $200 and government ...
Q: Two In the market for sugar, there has been a discovery of a new technology for more production of t...
A: As a result of the acquisition of new technology for further production of goods, supply is increasi...
Q: Price discrimination is indistinguishable from dumping. Discuss the accuracy of this statement?
A: The correct answer is given in the second step .
Q: Suppose that a particular emissions abatement strategy would result in a $121 billion reductions in ...
A: Given:- Discount rate=2% Time=25 years Reductions=$121 billion. To calculate:- Maximum amount spent ...
Step by step
Solved in 3 steps with 2 images
- Suppose that the monopolist can produce with total cost: TC = 100. Assume that the monopolist sells its goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q, = 120 - 2P, and Q; = 240-2P Suppose that consumers can mail the product from cheaper location to a more expensive location freely (mailing cost $0). What would be the monopolist profit? O $7200 $6400 $8000 $6000Suppose that the monopolist can prevent the existence of a second-hand market. In other words, there can be no resale of the product between consumers after the initial purchase from the monopolist. What would the profit be for the monopolist from charging only one price to the entire market? Again, with no second-hand market possible, suppose the monopolist can distinguish between type H and type L consumers and can offer a discount to type L consumers. What are the profit-maximizing prices the monopolist will charge? How many units of the good will each type of consumer buy? What will the monopolist’s total profit be? What is total consumer surplus with only one price (part a)? What is total consumer surplus with 3rd degree price discrimination (part b)?The monopolist has constant marginal and average cost AC-MC=70 and faces the market demand P120-Q. Suppose the monopolist can perfectly price discriminate by setting a two-part tariff: that is, the monopolist charges the consumer a fixed fee Fand a per unit price p. What are the optimal values of Fand p that the monopolist sets? O F-$2500, p-$70 O F-$3500, p-$70 O F-$2375, p-$95 O F-$1250, p-$70 O F-$2975, p-$85
- . Let the demand curve for a monopolist’s product be P = 100 – 2Qd and the marginal cost of production be constant at MC = 10. Suppose that the firm considers moving from a uniform pricing strategy to a two-block tariff where the first block provides 15 units at a price of P1 = $70 and the second block provides an additional 15 units at a price of P2 = $40. How much does the monopolist’s profit rise with this scheme?2. Suppose there is a monopolist sells good x with constant marginal cost c. Also, there are two consumers with money endowment m; (i=1,2) and utility functions: 'u + zx = 'n Uz = (3/2)x"² + m, m, = m, – px, a) Derive each individual's demand for good x b) Suppose now that the monopolist can only engage in indirect (2mnd degree) price discrimination and decides to offer take it or leave it contracts of the form (ri,X;), where r; is a lump-sum payment that entitles the consumer to purchase x; units of the good. i. Write down the 2 incentive compatibility constraints and the 2 participation constraints that the solution needs to satisfy Given the properties of the utility functions, which constraints are binding? iii. ii. Formulate the monopolist's profit maximizing problem given your answer to ii above and compute the optimal contracts that this monopolist should offer. iv. What are the consumption levels for both consumers? Which level of consumption is efficient and why? With your…2. A monopolist has two specific demanders with demand equations: qA = 10 – p and qB = 10 – 2p. This monopolist implements an optimal two-part tariff pricing scheme, under which demanders pay a fixed feea for the right to consume the good and a uniform price p for each unit consumed. The monopolist chooses a and p to maximize profits. This monopolist produces at constant average and marginal costs of AC = MC = 2. The monopolist’s profits are __________ and the average price paid by demander B is _________.
- Complete the first row of the following table. Pricing Mechanism Profit Maximization Marginal-Cost Pricing Average-Cost Pricing Short Run Price Quantity (Subscriptions) (Dollars per subscription) Suppose that the government forces the monopolist to set the price equal to marginal cost. Complete the second row of the previous table. Profit Suppose that the government forces the monopolist to set the price equal to average total cost. Complete the third row of the previous table. O Allow its costs to increase O Work to decrease its costs Long-Run Decision Under average-cost pricing, the government will raise the price of output whenever a firm's costs increase, and lower the price whenever a firm's costs decrease. Over time, under the average-cost pricing policy, what will the local cable company most likely do?A monopolist faces the demand curve illustrated below. 12 9 -1 -2 12 13 11 15 15 1 1s 19 20 21 22 23 24 Suppose the monopolist faces a marginal cost of $5, and that there are no fixed costs. Thus, the marginal cost is equal to the average total cost in this case. Given this, what is the monopolist's profit maximizing price if it is not able to price discriminate O $5 O $8.33 O $2 O $10 $7.50 N O087654321Suppose a monopolist faces two groups of consumers. Group 1 has a demand given by P1=50-2Q1 and MR1=50-4Q1. Group 2 has a demand given by P2=40-Q2 and MR2=40-2Q2. The monopolist faces MC=AVC=ATC=$10 regardless of which group he supplies to. We can infer from the demand equations that Group ___ is the inelastic group because the demand is ____ than that of the other group. a. 2; flatter b. 2; steeper c. 1; steeper d. 1; flatter
- Suppose that the monopolist sells its goods for two segments of the population and the demand functions are given by Q, = 120P * and Q, = 320P,.f the monopolist can produce at AC-MC=6 and can discriminate the prices what are the optimal prices, respectively? %3D %3D O $7, $8 O $7, $4 O $4, $7 $8, $7Suppose that the monopolist can produce with total cost: TC goods in two different markets separated by some distance. The demand curves in the first market and the second market are given by Q1= 120-P, and Q2 = 240-4P. If the monopolist can maintain the separation between the two markets, what would be the total profit of the monopolist under price discrimination? 100. Assume that the monopolist sells its %3D O$ 4,525 O $ 5,525 O $ 6,025 $ 3,025Part A Suppose that the monopolist can produce a good with total cost TC = 24Q. Assume also that hemonopolist sells its goods in two different markets separated by some distance. The demand curves inthe first market and the second market are given by Q1 = 120 - P1/2 and Q2 = 360 - 3P2. If themonopolist can maintain the separation between the two markets, what level of output should beproduced in each market, and what price will prevail in cach market? Why are the two prices different?Verify the Lemer Index for cach market. Part B Suppose a monopoly faces a demand curve by Q = 154 - P/3. The monopolist has two plants. The firsthas a total cost function given by TC1, = 3Q21 and the second plant's total cost function is given byTC2 = 2Q22 How much total output will the monopoly choose to produce and how will it distributethis production between its two factories in order to maximize profits? Find monopolist's profits.