Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 12SQ
To determine
The profit maximizing output of the monopolist.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
✓ demand and lies
Consider a monopolist facing a downward-sloping demand curve. Average revenue is
✓ marginal revenue.
Compared to a competitive market, a monopolist sells a
✓ quantity at a
quantity at a
Compared to a competitive market, a monopsonist buys a
If, at the current level of output, a monopolist determines that the elasticity of demand is -0.15, then the monopolist
✓price.
✓ price.
Solve the attachment.
A firm produces two kinds of products: Word and Excel. Both products are made by a monopolist.
Four consumers are considering buying these products. The first consumer's willingness-to-pay (WTP)
for Word is 10, and her WTP for Excel is 1. The second consumer's WTP for Word is 8, and her
WTP for Excel is 5. The third consumer's WTP for Word is 5, and her WTP for Excel is 8. Lastly,
the fourth consumer's WTP for Word is 1, and her WTP for Excel is 10. Assume that marginal costs
for both products are zero.
(1)
price for each product? Also, compute the firm's profit under the optimal a la carte pricing.
Suppose that both products need to be sold separately. What should be the optimal
Now suppose that bundling is the only option. In other words, the monopolist only
(2)
sells two products together. What should be the optimal price for the bundle? Also, compute
the firm's profit under the optimal bundling.
(3)
should be the optimal mixed bundling prices? Compute the firm's profit under the…
Chapter 9 Solutions
Micro Economics For Today
Ch. 9.1 - Prob. 1GECh. 9.1 - Prob. 2GECh. 9.2 - Prob. 1YTECh. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQP
Ch. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQPCh. 9 - Prob. 10SQPCh. 9 - Prob. 11SQPCh. 9 - Prob. 12SQPCh. 9 - Prob. 13SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
Knowledge Booster
Similar questions
- A monopolist has four distinct groups of customers: group A has an elasticity of demand of 0.2, group B has an elasticity of demand of 0.8, group C has an elasticity of demand of 1.0, and group D has an elasticity of demand of 2.0. The group paying the highest price for the product will be group: a) D. b) C. c) B. d) A.arrow_forwardA profit-maximizing monopolist will always operate in the elastic region of demand.* True Falsearrow_forwardAn inventor has recently produced a new innovative product, a Dooder. The inventor has successfully received a patent for the Dooder and is now operating as a monopolist. The cost curves and market demand curves for Dooders is shown below. $16 $15 MC $14 $13 $12 $11 $10 $9 $8 Price Per Dooders $5 $4 $3 $2 $1 MR 1 2 3 4 6 6 7 8 9 10 12 16 Quantity of Dooders (a) What is the profit maximizing output for the monopolist? (b) What price will the monopolist charge? (c) How much revenue is the monopolist bringing in? (d) How much total profit is obtained by the monopolist? Please enter without any units or dollar signs. (If you answer is fifteen Dooders, just put 15. If your answer is three hundred dollars, just put 300) D ATC 11 13 15 14arrow_forward
- Explain why a monopolist never operates on the inelastic part of the demand curve.arrow_forward30. A monopolist will spend resources to advertise its product so long as A) net profits increase.B) gross profits increase.C) demand increases.D) total revenue increases.arrow_forwardRevenues and costs (dollars) charge the price of. 49. Refer to the graph above. If this monopolist were allowed to choose the profit - maximizing level of output, it would produce _, earn _ in profit/ loss, and create _ in deadweight loss. a) 400 units; $20; $1,200 profit; $2,00 b) 300 units; $30; $3,000profit; $2,000 c) 200 units; $10; $3,000 loss, zero d ) 500 units; $20; $1,000 loss; $3,000 50. Refer to the graph above. If this monopolist were regulated by government and charge the price of agency and forced to set the socially optimal price, it would likely produce. and the market would be units; $10; competitive. d) 400 units; $15; productive. a) 500 units; $20; efficient b) 600 units, $15; inefficient. c) 300 40 30 20 10 $ C C Refer to the graph below: SMC stays for short-run MC. SMC D ATC AVC MR 0 200 400 600 800 1,000arrow_forward
- A market has a linear demand curve y(p) = 40 – 5. а) A monopolist is operating with a constant marginal cost of 10, and there are no fixed costs. i. What is the monopolist's profit-maximising output and what is the price it charges? ii. What is its profit at this price and output? ii. Calculate the deadweight loss. iv. Illustrate the profit maximising output, price, and the deadweight loss, with a diagram.arrow_forwardThe monopolist is productively-efficient, because, like the perfect competitor, it operates at minimum ATC is the long-run. True Falsearrow_forwardA price-discriminating monopolist will charge a higher price to consumers with * a more inelastic demand. a less inelastic demand. higher income. lower willingness to pay. less experience in the market.arrow_forward
- A monopolist faces a ______ demand curve, while a perfectly competitive firm faces a ______ demand curve. options: downward sloping; upward sloping. horizontal; downward sloping. downward sloping; horizontal. downward sloping; vertical.arrow_forwardWhat is the answer and why?arrow_forwardSuppose the inverse demand function for a monopolist's product is given by P=100-2Q and the cast function isC(Q)=10+2Q. What is the profit-maximizing price of the firm?A. $15 B. $51 C. $41 D. $32 And what is the profit-maximizing quantity of the firm?A. 24.5B. 18C. 20.5D. 16arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning