Bundle: Microeconomics, Loose-leaf Version, 10th + Mindtap Economics, 1 Term (6 Months) Printed Access Card
10th Edition
ISBN: 9781305782570
Author: William Boyes; Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 14, Problem 8E
To determine
To explain:
The possibility for loss in efficiency when a monopolist practicesprice discrimination and a lawsuit files against a monopolist forces an end to the practice.
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There is a monopolist in a market for a particular type of consumer goods. It is costly to create new types of products (brands) in this market, but consumers have different taste and thus some will prefer the new brand. Will the monopolist create too few brands or too many? Explain.
Consider a monopolist that faces a demand curve P = 40 - Q and has a total cost function TC = 12 + 50Q. At which of the following prices (you can choose multiple prices) would a monopolist be better off shutting down?
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A monopolist has a demand curve given by Q=100-P and a total cost curve given by TC= Q2 + 16.
Find the monopolist’s profit maximizing quantity and price. Indicate them on the graph.
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Calculate the price elasticity of demand at the equilibrium price level.
Chapter 14 Solutions
Bundle: Microeconomics, Loose-leaf Version, 10th + Mindtap Economics, 1 Term (6 Months) Printed Access Card
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- Suppose a monopolist faces a market demand curve Q = 50 - p. If marginal cost is constant and equal to zero, what is the magnitude of the welfare loss? If marginal cost increases to MC = 10, does welfare loss increase or decrease? Use a graph to explain your answer.arrow_forwardSuppose a profit-maximizing monopolist has total cost and marginal cost as follow TC = 8Q + 10 and MC = 8. It faces the demand curve P = 20-1/5Q. a) What is the equilibrium price and output?b) What is the total profit?c) Calculate the consumer surplus, producer surplus, and deadweight loss if the firm acts as a monopolist. Illustrate your answer with a diagramarrow_forwardIf the price is greater than actual total cost, does the monopolist make a profit, loss, or break-even?arrow_forward
- Suppose you are a monopolist in the market for a specific Q video game. Your demand curve is given by P = 80- - and 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?arrow_forwardHow much is total surplus if the market is perfectly competitive?How much is total surplus if the market is controlled by a single price monopolist?Suppose the single price monopolist started charging all customers the maximum price they are willing to pay. How much additional surplus is created?arrow_forwardThe table shows the demand schedule of a monopolist. Calculate marginal revenue and fill in the revenue column in the table. Assume that output can only be sold in integer amounts (i.e., 11 unit, 22 units, etc.). Once you have filled in marginal revenue, identify the quantity produced by the monopolist in this market. Quantity Price Marginal Marginal Cost Revenue 1 $13 $3 MR1 2 $12 $4 MR2 3 $11 $5 MR3 4 $10 $6 MR4 $9 $7 MR5 6. $8 $8 MR6 How many units does the monopolist produce? Quantity:arrow_forward
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