Suppose you work for Philippine Competition Commission and you find out that in province A, t only two available hospitals are planning to merge, which would result to a monopoly. If you do n allow for merging, hospital 2 will leave the market. Given the following cost functions and t information provided, would you allow for the merging of the two hospitals? Why or why not? Expla intuitively and mathematically. Hospital 1's cost function = 30 + q Hospital 2's cost function = 40 + 92 Joint cost function = 50+q+q2

Suppose you work for Philippine Competition Commission and you find out that in province A, t only two available hospitals are planning to merge, which would result to a monopoly. If you do n allow for merging, hospital 2 will leave the market. Given the following cost functions and t information provided, would you allow for the merging of the two hospitals? Why or why not? Expla intuitively and mathematically. Hospital 1's cost function = 30 + q Hospital 2's cost function = 40 + 92 Joint cost function = 50+q+q2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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**Practice**
Give only typing answer with explanation and conclusion The market demand for a monopoly firm is estimated to be: Qd = 100,000 - 500P + 2M + 500PR where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to be AVC = 520 - 0.03Q + 0.000001Q2 Total fixed cost in 2016 is expected to be $4 million. The profit-maximizing price for 2016 is $80. $100. $260. $520. $560.
E3
5. Suppose a company has a monopoly on a game called Monopoly and faces a demand curve given by QT = 100-P and a marginal revenue function given by MR = 100 - 2QT where QT equals the combined total number of games produced per hour in the company's two factories (QT = 91 + 92). If factory 1 has a marginal cost function given by MC₁ = q1-5 and factory 2 has a marginal cost function given by MC2 = 0.5q25, how much total output will the company choose to produce and how will it distribute this production between its two factories in order to maximize profits?
Please answer all parts...
A company operates two plants which manufacture the same item and whose total cost functions are C₁ = 5.8 +0.03(91)² and C₂ = 7.3 + 0.04(92)², where 9₁ and 92 are the quantities produced by each plant. The company is a monopoly. The total quantity demanded, q = 91 +92, is related to the price, p, by P = 400.04q. How much should each plant produce in order to maximize the company's profit?¹ 91 = 92 = i ! !
3. MUSEUM MONOPOLY MATH Once the museum has incurred the basic operating cost of 60 to open for the day, the average variable cost (and marginal cost) of serving each visitor is only 2. In other words, the museum's total daily operating cost function is DOC[Q] = 60 + 2Q, where Q is the number of visitors. Meanwhile, the inverse demand function for museum admission is P[Q] = 34 - Q. TIP: We used "average daily operating cost" instead of average total cost when discussing museums. a) If this museum were a commercial, profit-maximizing enterprise, then find its profit. TIP: You'll need to find Q* and P*. Even though you could answer this with a well-drawn graph, show that you can "do the math” to find the correct answer. TIP: This may sound familiar. What did you learn about drawing this graph? ☺ b) Suppose the museum manager set the price at 28, which is not the profit-maximizing price. Find its profit. For the remainder of the problem, suppose that the museum is instead a nonprofit…
AmonopolysellsitsproductinboththeU.S.andJapanese markets. The American inverse demand function is PUS = 100 – QUS, and the Japanese inverse demand function is PJ = 80 – QJ. PUS and PJ are both measured in dollars. The firm’s marginal cost is MC = 20 in both countries. Suppose the company can prevent resales between these two countries. In order to maximize its profit, what prices should the monopoly firm charge in the two markets?
"Tiffany" is a retailer monopolist who makes a unique product called the "diamond ring" that requires exactly one diamond as input, which is sold by a wholesaler monopolist, the "Diamond Corporation". Diamond Corporation faces a marginal cost of £60 per unit of input (this is also the firm's average cost). Assume that "Tiffany" faces the following inverse demand curve for diamond rings: Pt 320 – Qt where Pt is the price of red diamond rings in pounds per unit and Qt is the quantity of diamond rings offered for sale by "Tiffany". Similarly, Diamond Corporation charges a price, Pa, for the inputs in £ per unit and Qa is the quantity of inputs sold by Diamond Corporation. a) Derive the profit-maximising price and output for both firms, assuming that the two monopolists act as independent profit-maximising companies. Calculate profits of each firm. Use a clear diagram to illustrate your answers to explain your calculations. b) Now assume that the two firms merge. Calculate the post-merger…