A monopolist has a cost function given by C(y)=y2 and faces a demand curve given by P(y) = 120-y. If you impose a lump sum tax of £100 on this monopolist, what will be the impact on output? Explain your calculations and the intuition behind your result.
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A monopolist has a cost function given by C(y)=y2 and faces a demand curve given by P(y) = 120-y.
If you impose a lump sum tax of £100 on this monopolist, what will be the impact on output? Explain your calculations and the intuition behind your result.
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- A monopolist has a cost function given by C(y)=y2 and faces a demand curve given by P(y) = 120-y. a) What is the profit maximising level of output and the price that the monopolist will charge? Show your calculations. b) If you impose a lump sum tax of £100 on this monopolist, what will be the impact on output? Explain your calculations and the intuition behind your result. c) If you wanted to choose a price ceiling for this monopolist so as to maximise consumer plus producer surplus, what price ceiling should you choose? How much output will the monopolist produce at this price ceiling? Explain your calculations.A monopolist faces the demand function P= 10 - Qand the total cost function TC = %3D 2Q. Showing all your workings, calculate the maximum profit earned by the monopolist from using a two-part tariff.Consider the following inverse demand curve: p = 300 – 3Q A firm's cost function is given by C(Q) = 3600 + Q² Argue that this firm must be a natural monopolist. As a monopolist, what output and price will they charge? What will their profit be? Compare this to the outcome if they behaved as though they were in a competitive market. What is the difference in welfare?
- A monopolist has the following marginal revenue function MR = 1,600 - 20Q, and marginal cost function MC = 200 + 30Q and faces the following the demand curve p 1200-10Q. And the total cost function is TC= 200Q+15Q². Q refers to the number of units produced by the monopolist. Find the profit maximizing quantity (in number of units produced) for this monopolist. The result should be an integer number, no decimals (e.g. if the result is 3.65 write 4, if the result is 3.64, write 3). = Your Answer:Consider a market with 190 consumers. Of these, 90 of them have individual (inverse) demands given by: PM(Q)=10−Q, while each of the other 100 has an individual (inverse) demand of PS(Q)=10−10Q. The cost function of the monopolist serving this market is C(Q) = 6Q - Q^2/400 . (a) Find the aggregate demand. Analyze the cost function and find what kind of returns to scale it exhibits. Compute the efficient total output (ignoring break-even constraints).(b) Compute the optimal linear price (and quantity) for this monopolist, and the deadweight loss.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. Calculate the profit maximising price as a function of the consumer’s income Y carefully explaining all the steps in the derivation of the formula. B. 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=1,200-200P1. Calculate the profit maximising output produced and price charged in each country by the…
- Cost function of a monopolist is given by C=F +2Q where F stands for fixed cost. The monopolist will earn profit=0 if it charges price of $4. If the market demand is given by Q=20-p, what is the value of the fixed cost F?A monopolist's inverse demand function is P=150-3Q. the company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1)=6Q1, and the marginal cost of producing at facility 2 is MC2(Q2)=2Q2 A). Provide the equation for the monopolist's marginal revenue function. MR(Q)= ___ -___Q1-____Q2 B). Determine the profit-maximizing level of output for each facility. Output for facility 1: Output for facility 2: C). Determine the profit-maximizing price.Consider a monopolist with a total cost function given as C(Q) = 1.5Q2 + 40Q that faces an inverse market demand function P(Q) = 280 − 0.5Q **Calculate the profit-maximizing quantity, price, and economic profits for this monopolist, with the government imposing a $20 per unit tax. Quantity: ? (Round your answer to two decimal places). Price: ? (Round your answer to two decimal places). Economic profits: $ ? (Round your answer to two decimal places).
- 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?A monopolist faces the following aggregate demand function: Q = 28 – 1/2 P. Total production costs for the firm are TC(Q) = 40Q. Calculate the consumer surplus, producer surplus, and profits in equilibrium. Then, suppose that the monopolist decides to spend 10 to purchase a patent that would allow her to decrease total costs by 4 per unit. Find the new equilibrium quantity, price, new consumer surplus, producer surplus, and profits to the monopolist after the purchase of the patent.A monopolist has a cost function c(q) = 5q+800 and faces aggregate demand q=3000 - 120p. Suppose first that monopolist sells q=400 units. The monopolist's revenue would be The monopolist profit would be The absolute value of the price elasticity of demand would be The consumer surplus would be Now suppose that the monopolist chooses q to maximize its profit. The monopolist's revenue would be The monopolist profit would be The absolute value of the price elasticity of demand would be The consumer surplus would be