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 13SQ
To determine
The want of the consumers at the profit maximizing output of the monopolist.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The table below shows a monopolist's demand curve and the cost information for the production of its good. If the monopolist is trying to maximize its profit what would it be?
Quantity
Price per Unit
Total Cost
10
$100
$100
20
$80
$400
30
$60
$800
40
$40
$1,400
50
$20
$2,400
Question 40 options:
a)
$1,200
b)
$1,000
c)
$1,600
d)
$1, 800
Create graph that includes:
Demand curve, marginal cost, and marginal revenue.
Identify the profit-maximizing quantity and price for this monopolist. To do this you will need to determine marginal revenue at each level of output. Choose output that satisfies the monopolist’s profit maximizing condition of MR = MC.
Does this firm earn a profit? How much profit if they do?
Explain why each of the following statements is false. For each, write the correct statement.
A monopolist maximizes profits when MC = P.
The higher the price elasticity, the higher is a monopolist’s price above its MC.
Monopolists ignore the marginal principle.
Monopolists will maximize sales. They will therefore produce more than perfect competitors and their price will be lower.
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
- In the following situation, what should the monopolist do to maximize profit? Select the best answer. A monopolist is currently producing a level of output such that marginal revenue is $143 and marginal cost is $109. The monopolist then sets a price based on demand for the current level of output. Answer 2 Points Keyboard Shortcuts The monopolist should decrease output and decrease price. The monopolist should increase output and increase price. The monopolist should incs The monopolist should decrease output and increase price.arrow_forwardThe demand curve of a monopolist is Q=2000-100P. The marginal cost of a unit of the product is constant and equal 4. In addition, the monopolist has to pay a fixed cost of 1000. a. Write the revenue function. b. Write the total cost function. c. Find the profit-maximizing level of the output, and the corresponding profit.arrow_forwardSuppose a monopolist's profit-maximizing output is 400 units per week and that the firm sells its output at a price of $40 per unit. The firm has total costs of $8,000 per week. Assume the monopolist is maximizing its profit and earns $20 per unit from the sale of the last unit produced each week. Instructions: Enter your answers as a whole number. a. What are the firm's weekly economic profits? b. What is the firm's marginal cost? c. What is the firm's average total cost? Aarrow_forward
- Consider a monopolist market, X. The demand for the product is as follows: Px = 100 – Qx. The firm uses 1 Y to produce one X, and product Y is produced by another monopolist firm. Who benefits if these two firms merge together to create a large vertically integrated monopoly? a.X producer is better off, Y producer and consumers are worse off. b.Both firms are better off, consumers are worse off. c.Both firms and consumers are better off. d.Consumers are better off, both firms are worse offarrow_forwardA simple profit-maximizing monopolist with a continuous linear demand curve has positive marginal costs at all levels of production above X = 0. Which one of the following statements is FALSE in the short run? Select one: a. At the chosen level of output, an increase in the price of the good will necessarily reduce total revenue b.At the chosen level of output, demand for the good is price elastic c. At the chosen level of output, the monopolist is not maximizing total revenue d.At the chosen level of output, economic profit is necessarily positivearrow_forwardA simple profit-maximizing monopolist with a continuous linear demand curve has positive marginal costs at all levels of production above X = 0. Which one of the following statements is FALSE in the short run? Select one: a. At the chosen level of output, an increase in the price of the good will necessarily reduce total revenue b. At the chosen level of output, demand for the good is price elastic c.At the chosen level of output, the monopolist is not maximizing total revenue d.At the chosen level of output, economic profit is necessarily positivearrow_forward
- Suppose the demand curve for a monopolist is QD = 400 - P, and the marginal revenue function is MR = 400 - 2Q. The monopolist has a constant marginal and average total cost of $40 per unit. a. Find the monopolist's profit-maximizing output and price. Show on a graph. b. Calculate the monopolist's profit.arrow_forwardSuppose there is a monopolist in the market for a specific video game facing a demand curve: P = 20-0.5Q with MR = 20 - Q. The monopolist marginal cost curve is MC = 4, its total variable costs are TVC = 4Q and it faces a total fixed costs equal TFC = $102. a. What is the optimal quantity to maximize profit? b. What is the optimal price to maximize profit? c. What is the profit for the monopoly? d. What is the consumer surplus?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., 1 unit, 2 units, etc.). Once you have filled in marginal revenue, identify the quantity produced by the monopolist in this market. Not all numbers in the answer bank will be used. Quantity Price Marginal cost Marginal revenue 1 $13 $1 Answer Bank $12 $2 $3 $6 $1 $5 $10 3 $11 $3 $0 $7 $8 $9 $12 4 $10 $4 $13 $11 $2 $4 5 $9 $5 6. $8 $6 %24arrow_forward
- Suppose a monopolist's profit maximizing output is 200 units per week and that the firm sells its output at a price of $60 per unit. the firm has total cost of $9000 per week assume the monopolist is maximizing its profit and earns $30 per unit from the sale of the last unit produced each week. a. What Are the firms weekly economic profits? $ b. What is the firms marginal cost? $ c. What is the firms average total cost? $arrow_forwardThere are two groups of consumers. In the first group, each consumer has the inverse demand function P = 40 – Q. In the second group, each consumer has the inverse demand function P = 20 – Q. There are 10 consumers in each group, or 20 consumers in all. Marginal cost is always zero. The monopolist wants to maximize profits by designing a two-part tariff. Calculate the two parts of the tariff, and calculate profits.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
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 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