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 7SQP
To determine
Price that monopolist charge, how much output the monopolist produce.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
1) A monopolist faces a demand curve Q = 600 – 10P and has the total cost curve
TC(Q) = 200 + 20Q + 2Q². What is the monopolist's marginal revenue and marginal cost? What is the
profit-maximizing price and quantity? What is the maximized profit?
Suppose 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 diagram
Suppose that a monopolist’s demand curve is P = 9 – 2*Q. Marginal cost is expressed as follows: MC = 0.5*Q.
What is the profit-maximizing price (P) the monopoly should set? What would be the output (Q) at that price?
What are the current values for the consumer and producer surpluses (CS and PS)? Is it possible to calculate the profit made by the monopolist? If so, how much is it? If not, what other information would be needed to do that?
What would be the 2 key options for a government regulator to increase the consumer surplus (CS) and reduce the producer surplus (PS)? Explain briefly the pros and cons of one of the options!
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 a cost function of c(y)=yso that its marginal costs are constant at $1 per unit. it faces the following demand curve: 0 if p> 20 or 100/y if p is less than or equal to 20 find (1) What is the profit-maximizing choice of output? (2) If the government could set a price ceiling on this monopolist in order to force it to act as a competitor, what price should the government set? 3) What output would the monopolist produce if he is forced to behave as a competitor?arrow_forwardThe diagram below shows a monopolist's marginal cost schedule and the demand curve. Find and depict the following items within the diagram and briefly explain how you found them: Price Monopoly Price Demand Marginal Revenue Total Surplus Quantity Maximising Quantity b) Draw a possible marginal cost curve for the monopolist into the diagram that is consistent with all the other curves that are already given. c) Based on the marginal cost curve that you constructed in part (b), find and highlight the monopolist's total costs at the monopoly price in the diagram. d) Briefly explain the shape of the marginal revenue curve as compared to the demand curve in the diagram.arrow_forwardA monopolist has a demand curve given by P = 90 - 2Q and a total cost curve given by TC = 72 + Q2. The associated marginal cost curve is MC = 2Q, %3D and the associated marginal revenue curve is MR = 90 – 4Q. What is the profit-maximizing quantity and price. How much economic profit does the monopolist earn? Suppose this monopolist could engage in an advertising campaign that would increase demand to P = 108 – 2Q (and MR = 108 – 4Q). What would be the maximum amount this company would be willing to pay for this advertising campaign?arrow_forward
- Market research shows that a particular monopolist faces a market demand function given byIts cost function isP （Q） = 50 - 2Q.C（Q）= 47 + 10Q What is the monopoly market price and quantity? What is the monopolist’s profit? What is consumer surplus at the monopoly price? What would the price and quantity be in this market be if the monopolist behaved as in perfect competition? What is the consumer surplus in the case of perfect competition? Which is higher and why? What is the “social cost” of monopoly?arrow_forwardA monopolist faces the demand curve Q(P ) = 50 − P 2 . The firm can produce output with marginal costs MC(Q) = Q and no fixed costs. Hint for the following questions: if revenue is of the form R(Q) = (a − bQ)Q, then the derivative of revenue is a − 2bQ. (a) What is the profit maximizing price for the monopolist in this market? (b) What is the deadweight loss from monopoly in this market, compared to the efficient output that sets price equal to marginal cost? *Please fully explain out any matharrow_forwardSee attached image for question. Thank you!arrow_forward
- 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?arrow_forwardConsider the diagram below: a) If a firm is single –price monopolist, what price firm will charge and what is the profit maximizing output? Calculate the area of monopolist’s profit (in tk), consumer surplus (in tk) and deadweight loss (in tk) from the information of the diagram. b) If the firm would work as a perfectly price discriminating monopolist, what amount of output firm would have produced? How firm would have charged price? Calculate the area of consumer surplus (in tk), profit(in tk) and deadweight loss (in tk) from the information of the diagram. Don,t copy from anywhere. Answer must be correct.Do all answer.arrow_forwardA monopolist has a cost function given by c(y) = y2 and faces a demand curve given by P(y) = 120 − y. a. What is his profit-maximizing level of output? What price will the monopolist charge? b. Suppose you put a lump sum tax of $100 on this monopolist. What would its output be? c. If you wanted to choose a price ceiling for this monopolist so as to maximize consumer plus producer surplus, what price ceiling should you choose? How much output will the monopolist produce at this price ceiling?arrow_forward
- Using a graphical approach, once you have found the optimal level of output for the monopolist, how would you find the corresponding price? Group of answer choices From the point of optimal level of output, trace up to the average total cost curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the marginal cost curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the demand curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the marginal revenue curve, and then trace horizontally over to the price axisarrow_forwardOnly one firm produces and sells soccer balls in the country of Wiknam, and as the story begins, international trade in soccer balls is prohibited. The following equations describe the monopolist's demand, marginal revenue, total cost, and marginal cost: Demand: P=15-Q Marginal Revenue: MR = 15-20 Total Cost: Marginal Cost: TC=3+Q+0.50² MC = 3+Q where Q is quantity and P is the price measured in Wiknamian dollars. The monopolist produces soccer balls and sells them at a price of s each. The monopolist's profit is s The domestic production of soccer balls will to Wiknam will soccer balls in this case. One day, the King of Wiknam decrees that henceforth there will be free trade-either imports or exports-of soccer balls at the world price of $10. The firm is now a price taker in a competitive market. soccer balls, and domestic consumption will to in this case. In the analysis of international trade in Chapter 9, a country becomes an exporter when the price without trade is below the world…arrow_forwardIn the next two problems, (1) and (2), consider a monopolist that maximizes profits and charges all consumers the same price. The inverse demand function is P = 20 – 2Q, where P is the price and Q is output. Calculate the deadweight loss to consumers (if any) and to the monopolist (if any). (1) Marginal cost is always zero. (2) Marginal cost is MC = Q. Hint: Graphing the problem may help you visualize it.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc