The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q2. This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400. What is optimal Q given the new market price?
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A: P1= 1250-3.5Q C(Q)= 1200+1.5Q+0.8Q2
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A: Q=156-2P2P=156-QP=78-0.5QNow,TR=P x QTR=(78-0.5Q)Q =78Q-0.5Q2MR=78-QGiven,TC=5654+Q2MC=Q(Here if…
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A: Q=423-2P2P=423-QP=423-Q2P=211.5-Q2Now,TR=P×QTR=(211.5-Q2)QTR=211.5Q-Q22Thus,MR=∂TR∂QMR=211.5-Q
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The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q2. This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400.
What is optimal Q given the new market price?
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- The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q2. This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400. Based on this information, what are the optimal profits with a generic treatment?The demand function for a monopolist is given by: P1 = 1,250 – 3.5Q and the cost function is given by C(Q) = 1,200 +1.5Q + 0.8Q. This firm, Otsuka, is a pharmaceutical holding a patent on a depression treatment, Rexulti. However, the patent expired, and a generic treatment is offered in the market. Now, the new market price is P=$400. Based on this information, determine the following: (Use no decimals in final answers). %3D a. The optimal Q with the pattent is: $ b. The optimal P with the pattent is: $ c. The optimal profits with the pattent is: $ d. The optimal Q with the generic treatment is: $ e. The optimal P with the generic treatment is: $ f. The optimal profits with the generic treatment is: $ g. In this which of the statement is correct? (A, B, C, or D). A. The lost of the patent changed the market condition from monopoly to oligopoly. B. The lost of the patent changed the market condition from PCM to monopoly. C. The lost of the patent changed the market conditions from…A city in a developing country does not have a provider of water and sanitation services, leading to poor health outcomes for its citizens. A firm is considering entering thatmarket. The cost curve is C(g) = 10 + 2q, and the inverse demand is P(g) = 10-q. Thegovernment of that city knows that, because of the high fixed cost to operate in this market, any entrant is likely to become a monopolist. Thus, they decide to implement the following regulation: the firm is not allowed to choose a price above an upper limit of p (which the government chooses and sets in the law before the firm decides to enter).There will be no transfers between the government and the firm.Assume that the firm only enters the market if it can get profits of at least zero, given the government's choice of p. Suppose that the government's goal is to maximize consumer surplus. Which of the following statements is the most correct? The government needs to set p = 2, because it's the marginal cost. That eliminatesthe…
- Consider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=813-7p, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 7 Q What is the profit maximizing price for this monopolist? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)A city in a developing country does not have a provider of water and sanitation services, leading to poor health outcomes for its citizens. A firm is considering entering that market. The cost curve is C(q) = 10+2q, and the inverse demand is P(q) = 10—q. The government of that city knows that, because of the high fixed cost to operate in this market, any entrant is likely to become a monopolist. Thus, they decide to implement the following regulation: the firm is not allowed to choose a price above an upper limit of p (which the government chooses and sets in the law before the firm decides to enter). There will be no transfers between the government and the firm. Assume that the firm only enters the market if it can get profits of at least zero, given the government's choice of p. Suppose that the government's goal is to maximize consumer surplus. Which of the following statements is the most correct? (a) The government needs to set p = 2, because it's the marginal cost. That…Consider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=1077096p-6, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 6 Q What is the profit maximizing quantity for the monopolist? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)
- A monopolist faces two separate markets and can price discriminate accordingly. The demand in the first market is Q1 = 345p, and the inverse demand in the second market is P = 439 – 4Q2. The total cost of production is c(Q) = 1.5(Q1 + Q2). Answer the following: If rounding is needed, write your answers to 3 decimal places. a) - Find the profit maximising price for the first market. b)i Find the profit maximising price for the second market.A monopolist has discovered that the inverse demand function of a person with income Y for the monopolist’s product is P = 0.002Y-Q where P is the price, Y the income, and Q is the output. The monopolist can observe the incomes of its consumers and hence vary its price accordingly. The monopolist has a total cost function C(Q) = 100Q. A monopolist has a constant marginal cost of £2 per unit and no fixed costs. He faces two separate markets in the United States and in the UK. The goods sold in one market are never resold in the other. He sets one price P1 for the US market and another price P2 for the UK market (both measured in £). The demand in the United States is given by Q1=7,000-700P1 and the demand in the UK is given by Q2=1,200-200P2. Calculate the profit maximising output produced and price charged in each country by the price-discriminating monopolist and comment in which country the price charged is higher and by how much. Explain if your answer above is as expected by…A monopolist produces a unique product in three different plants, each with its own marginal cost structure. The overall market demand for the product is governed by the demand function = 128 - 8* P,where is the total quantity demanded, and Pis the market price. To meet this demand, the monopolist must decide on the allocation of production quantities Q1, Q2 and Q3 across Plant 1, Plant 2, and Plant 3 respectively. The marginal costs (MC) for producing the good in each plant are as follows: MC₁ = 1, MC₂ = 1 + 2 and MC3Q3. How many units should the monopolist optimally produce in Plant 1 to contribute to the total market demand 62 units O unit 63 units
- A monopolist with cost function C(q) = ;q? faces 2 consumers with the following demands: p(q1) = 10 - q1 and p(q2) = 20 – 2q2. Determine prices, quantities to be produced and sold and the monopolist's profits in the following cases: (a) The good can be resold at zero cost among consumers and it is technologically impossible to sell it in bundles of more than 1 unit. b) There is resale at zero cost and bundling in packages of arbitrary size. c) Resale is possible at a cost of "t" per unit. d) The good is a personal and non-transferable service. e) Repeat the above analysis, but this time assuming that costs are C(q) = q with q < 8.Tobacco King is a monopolist in the cigarette market in Nicotiana Republic, where the Singaporean dollar is used as the official currency. The firm has a constant marginal cost of $2.00 per pack. The fixed cost of the firm is $50 million. The firm’s demand curve can be expressed as P = 8 - 0.04Q, where Q is the quantity demanded (in millions of packs) and P is the price per pack (in $).] [In a table show Tobacco King, the monopolist’s demand schedule, total revenue, average revenue, and marginal revenue for prices $2, $4, $6, and $8. (Hint: demand schedule refers to prices and quantity demanded at those prices). Based on the table created in answer to part (a), show Tobacco King’s average revenue and marginal revenue curves in a graph. Comment on why the MR curve lies below the AR curve in 100 words or less. Add marginal cost curve to the graph drawn in part (b). Find out the price and quantity combination of cigarettes packets at which, Tobacco King will maximize its profitConsider a monopolist local movie theater which has two distinct client groups, adults and seniors. The inverse demands for the two group are given by:p(qA) = a − b · qAp(qB) = a/3-b/3.qB(a) Describe the demand function in the two markets graphically and then compute the demand elasticity in each market.(b) Compute the demand function qP under the assumption that the movie theather canonly offer a single price to both segments of the market. (Hint: at a given price addthe demand of the adults and senior market. You need to go from the inverse demand function to the demand function.) Illustrate the aggregate demand function in contrast to the demand functions in each segment. Now compute the optimal price of the movie theater when it can only offer a single and common price to the market segments. Who goes to the movies and who does not?(c) Next allow the movie theater to offer different prices in each segment and customerscannot mispresent their identity. What is the optimal price in…
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