Suppose there are two monopoly firms,producing output Q1 and Q2 with a constantMC = 2. Suppose that demand for Firm 1 andFirm 2 is respectively given byP1 = 10 – 2Q1P2 = 6 – 2Q2The corresponding Marginal Revenue (MR)curves are given by:MR1 = 10 – 4 Q1MR2 = 6 – 4Q21) Compute the profit maximizing QuantitiesQ1 and Q2 for these firms. Compute MR foreach firm and show that at these Quantities,MR1 = MR2. Briefly explain why?2) Compute the two ratios: Q1/(Q1+Q2) andQ2/(Q1+Q2).3) Using the quantities in 1, compute TR (Totalrevenue) for each firm and also TC for eachfirm.4) Suppose instead of producing thequantities Q1 and Q2 from 1, each firmproduced half of (Q1+Q2 from 1). Computethe MR for each firm if they produced half thetotal output. Explain why half the total outputcannot be an equilibrium outcome.5) Using the axis below, graph the MR curvesand the equilibrium outcome.

1) The monopoly's profit-maximizing option will be to produce at the quantity where marginal revenue…

Answered: Suppose there are two monopoly firms,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) b) c) q=e q= -2p+ 16 20000 2 q=400 - 8p
31) If the market demand elasticity is constant at -3 and a monopolist's MPL = 1.2L-0.5, then the labor demand for the monopoly is A) 0.8PL-0.5. B) 0.4PL-0.5. C) 0.8PL-2. D) 0.4PL-2. 32) Suppose the market demand elasticity is constant at -2, and there are three identical firms in the oligopolistic market. A Cournot firm's MPL = 1.2L-0.5, then the labor demand for a Cournot firm is A) PL-0.5. B) 0.6PL-0.5. C) 0.2PL-2. D) PL-2. 33) If the labor market is competitive, a monopoly output market will result in A) a lower wage than that of a competitive output market. B) a higher wage than that of a competitive output market. C) less labor hired than in a competitive output market. D) more labor hired than in a competitive output market. For the following, please answer "True" or "False" and explain why. 34) If the price of a competitive firm's output increases, the firm responds in the short run by demanding more labor. 35) If the…
↑ If a monopoly faces an inverse demand curve of p=270-Q has a constant marginal and average cost of $90, and can perfectly price discriminate, what is its profit? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination (x) is $ 16.200 (Enter your response as a whole number) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is CS=$ W-s OWL-S
Consider a monopoly with the following marginal cost and demand curves: MC=2Q+200,p=2,600−2Q d. Do the welfare analysis of the equilibrium resulting from the monopolist’s profit-maximization. That is, calculate the consumer surplus, producer surplus, and deadweight loss (if it exists). e. Suppose there is a positive externality associated with the consumption of the good provided by this monopolist. Does the market structure (monopoly) exacerbate or alleviate the inefficiency (deadweight loss) resulting from such externality? Use math or a graph to support your answer. f. Suppose instead that there is a negative externality associated with the production of the good provided by this monopolist. Each unit produced generates a marginal external cost of x dollars. For which value of x does the under-provision inherent to the monopoly completely offset the inefficiency associated with such externality?
Please answer question d, e and f
Intel is the world’s largest manufacture of semiconductor chips by revenue. During the 1990s, Intel became the dominant supplier of microprocessors for PCs and was known for aggressive and anti-competitive tactics in defense of its market position. Consider the market for Intel’s Pentium II processor, released in May 1997. Assume Pentium II enjoyed a monopoly in computer processors. Intel’s cost of production is characterized by function C = 10Q2, marginal cost MC = 20Q, while the market demand for the product is P = 400 − 10Q. Calculate Intel’s profit-maximizing quantity for its Pentium II processor. How much would Intel price its Pentium IIs?
1) Utku's company is monopoly in the oil market. Demand equation in this market is given as: Q = 100 – 2P and total cost equation is as the following: TC = 2Q2 + 10. Find monopoly quantity, price and profit.
Price 180 168 156 144 132 120 108 96 84 72 60 48 36 24 12 0 1 0 45 90 135 180 225 270 315 360 405 450 495 540 585 630 Quantity MR <<--MC=AC A monopoly face the following demand, marginal revenue and marginal cost functions Note that in this case MC(Q) = AC(Q) for all Q. Calculate consumer surplus if the monopoly charges the (single) profit maximizing price 675
Do this problem using excel solver. Africa controls 80% of the world's lithium refining, a material needed for the production of lithium batteries in electric vehicles. The demand for lithium batteries is P = $20,000 - 2.5 Q, where Q is in tons and P is in $/ton. The long run marginal and average cost of production is constant at $2,000/ton. a) Assuming the monopoly model applies, determine price, quantity, and profit for Africa using excel solver b) Now assume new firms enter the lithium market, resulting in (perfect) competition. Determine the price, quantity, and profits, when the industry is in (long run) equilibrium using excel solver c) Finally, compare social welfare for the two cases, and determine deadweight loss using excel solver.
I would like help specifically for question 4 of this problem. Questions 1-3 are provided for context. Thank you.
2. Derive the monopoly equilibrium, i.e., the profit maximizing price and quantity, as well as the firm's profit, for each of the demand functions given below, assuming the firm's total cost of q units of output is given by C(q) = 4q a) b) c) g=e=²p+16 20000 2 9= P q=400 - 8p
Answer the following 2 questions a) Can a firm have market power even if it is not the only firm in the market? Why? How do you measure market power? b) Is there a social cost associated with profit maximisation in monopoly? Why? Please illustrate your reply with a graph

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