Consider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=813-7p, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 7 Q What is the profit maximizing price for this monopolist? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)
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- Consider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=1077096p-6, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 6 Q What is the profit maximizing quantity for the monopolist? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)A monopolist faces the following market demand function: D(P) = 100 – P and has total costs equal to TC(Q) = 100 + 100 Show that the monopolist's cost function is subadditive for all relevant levels of demand (for all Q< 100). (Hint: Let EN Qi = Q be a way to split up the total production of quantity Q in N different firms. You can then use the fact that the minimum of EN Q? is reached at Qi = 8.)A monopolist faces a market demand curve given by Q(p) = 70 – p. Its total costs are described by TC(Q) = 3ố0 Q³ – 5Q + 250. 1 a) Derive the monopoly price, quantity, and profits. b) Calculate Lerner Index under the monopoly equilibrium. c) Now suppose the government sets the maximum price at $40. What output level and price level will the monopolist choose to maximize profits? What is the deadweight loss? d) Suppose the government sets the maximum price at $30. What output level and price level will the monopolist choose to maximize profits? What is the deadweight loss?
- The monopolist faces the demand curve D(p) = 100 – 2p. Its cost function is c(y) = 2y. What is your optimal level of production and prices? Solve mathematically and graphConsider the case of a monopolist who charges the same price to all consumers. The demand for the good is given by Q=813-7p, where Q denotes the quantity demanded at price p. The firm's total cost of producing Q units is given by the function C(Q) = 7 Q What is the efficiency loss in the monopoly equilibrium? (As usual, you must enter a number below, not a ratio, not an expression with symbols..., just a number.)A single firm produces widgets, with a cost function and inverse demand function as follows, C(q) = 150 + 2q P(Qd) = 10 − 0.08Qd (a) Calculate the monopolist’s profit-maximizing price, quantity, and profit if he can charge a single price in the market (single price monopolist). (b) Suppose the firm can sell units after your answer to (a) at a lower price (2nd-degree price discrimination, timed-release). What quantity will be sold for what price in this second-tier market? Calculate the monopolist’s profit. (c) Suppose each new tier of pricing the monopolist introduces increases fixed costs by $2 (quantities can be irrational). What is the profit-maximizing quantity, number of prices, monopolist’s profit, and deadweight loss? (d) Suppose the firm can perfectly price discriminate (1st-degree) with a 40% increase in marginal cost; calculate the profit-maximizing quantity, monopolist’s profit, and deadweight loss? (e) Between (c) and (d), which is socially preferred? Which would the…
- 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?Suppose inverse demand is given by the following equation: P(Q) = 600 - 20Q Suppose further that you are a monopolist with constant marginal cost equal to 40. How much profit do you earn at the optimal price and quantity? A) 3920 B) 1120 C) 0 D) 4500Market 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 serves a market with five potential buyers, each of whom would buy at most one piece of the monopolist's good. Anna would be willing to pay up to £50 for it, Bob up to £70, Chloe up to £90, Dave up to £110 and Elizabeth up to £130. The monopolist's variable cost function is given in below table. [Note: In parts (a) and (b), working outs only need to be shown for at least one result per line of the table.] Quantity Marginal Costs Price Marg. Revenue a) 1 50 2 55 3 60 4 65 5 70 Indicate in the table which price the monopolist would want to charge for each given quantity. b) Find the marginal revenue for each quantity.A monopolist serves a market with five potential buyers, each of whom would buy at most one piece of the monopolist's good. Anna would be willing to pay up to £50 for it, Bob up to £70, Chloe up to £90, Dave up to £110 and Elizabeth up to £130. The monopolist's variable cost function is given in below table. [Note: In parts (a) and (b), working outs only need to be shown for at least one result per line of the table.] Quantity 1 Marginal Costs 50 Price Marg. Revenue 2 55 3 60 d) Find the total surplus maximising (i.e., socially optimal) quantity. e) Quantify the Deadweight Loss! 4 65 5 70Question 4. Consider a monopolist facing a demand curve of the form D(p) = 100 – 2p where p is the - unit price. Suppose the monopolist has a constant marginal cost of production of $2 a unit. Bunter was asked to determine the price which would maximize consumer surplus. Here is his solution: Total surplus as a function of price is 50(100 – 2x)dx. The derivative of this with respect to p is -(100-2p). This is maximized by making p as large as possible, i.e., p = 50. Is Bunter correct? If not, what is the error that Bunter has made?