Suppose you are a monopolist in the market for a specific Q video game. Your demand curve is given by P = 80 and I 2 your marginal cost curve is MC = Q. Your fixed cost is $400. i) Derive the marginal revenue curve. ii) Calculate the equilibrium price and quantity. iii) What is the profit?

Suppose you are a monopolist in the market for a specific Q video game. Your demand curve is given by P = 80 and I 2 your marginal cost curve is MC = Q. Your fixed cost is $400. i) Derive the marginal revenue curve. ii) Calculate the equilibrium price and quantity. iii) What is the profit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Which of the following is necessary for a firm to practice price discrimination? Group of answer choices a. The firm is a member of a cartel. b. The demand curve for the product is perfectly inelastic. c. The firm can prevent resale of its goods. d. The government strictly enforces antitrust laws. e. The demand curve for the product is perfectly elastic.
Exercise 3.3. Suppose a profit-maximizing monopolist is producing 800 units of output and is charging a price of $40 per unit. a. If the elasticity of demand for the product is -2, find the marginal cost of the last unit produced. b. What is the firm's percentage markup of price over marginal cost? c. Suppose that the average cost of the last unit produced is $15 and the firm's fixed cost is $2000. Find the firm's profit.
Website Profit The latest demand equation for your gaming website, www.mudbeast.net, is given by q=-100x + 1500 where q is the number of users who log on per month and x is the log-on fee you charge. Your Internet provider bills you as follows. Site maintenance fee: $50 per month High-volume access fee: $0.50 per log-on Find the monthly cost as a function of the log-on fee x. C(x): = X Find the monthly profit as a function of x. P(x) = Determine the log-on fee you should charge (in dollars) to obtain the largest possible monthly profit. x = $ per log-on What is the largest possible monthly profit (in dollars)? $
If the price is greater than Actual total cost, does the monopolistic firm makes a profit, loss, or break-even?
A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What type(s) of profit would you expect a monopolist to earn in the long-run? Why the difference? Use the editor to format your answer
What are ways in which a monopolist can engage in price discrimination?
Exercise 3.8. Dayna's Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C = 100 - 5Q + Q², and demand is P = 55 - 2Q. a) What price should DD set to maximize profit? What output does the firm produce? How much profit and consumer surplus does DD generate? b) What would output be if DD acted like a perfect competitor and set MC = P? What profit and consumer surplus would then be generated? c) What is the deadweight loss from monopoly power in part (a)? d) Suppose the government, concerned about the high price of doorstops, sets a maximum price at $27. How does this affect price, quantity, consumer surplus, and DD's profit? What is the resulting deadweight loss? e) Now suppose the government sets the maximum price at $23. How does this decision affect price, quantity, consumer surplus, DD's profit, and deadweight loss? f) Finally, consider a maximum price of $12. What will this do to quantity, consumer surplus, profit, and deadweight loss?
Alex Potter owns the only well in a town that produces clean drinking water. He faces the following demand P=100-Q, and marginal cost MC=20+2Q, marginal revenue MR= 100-2Q curves. In order to maximize profits, Alex should charge a price of $60 at the profit maximizing quantity with a marginal revenue equal to $60. $60 at the profit maximizing quantity with a marginal revenue equal to $80. $80 at the profit maximizing quantity with a marginal revenue equal to $80. $80 at the profit maximizing quantity with a marginal revenue equal to $60.
so if they acted like a monopolist and charged a single price to all consumers, what price would they charge to maximize profits? How do I figure this out looking at the graph?
Subpart 7
What is price discrimination? From the perspective of running a business, is this a good thing or bad thing for profits?
Problem 1. Market demand is P = 100-0.25Q, where Q is the total quantity demanded by consumers. Monopoly's costs are C = 10Q. (10 marks) a) Calculate prices and quantities if the monopoly uses block pricing with two prices. Calculate CS, DWL and firm's profit and demonstrate on a diagram. b) Find firm's output and profit if the firm engages in perfect price discrimination. Show on a diagram. I