Question-2 (Monopoly) A monopolist has an inverse demand curve given by p(y): 12 – y and a cost curve given by c(y) = 3y. = 1. Find the marginal revenue and marginal cost functions. 2. Find the optimal price and quantity for the monopolist. 3. Find the optimal price and quantity if the market is competitive. Note that in the competitive market firm produce where MC-AC. 1. Calculate the consumers surplus and deadweight loss of due to monopoly.

Question-2 (Monopoly) A monopolist has an inverse demand curve given by p(y): 12 – y and a cost curve given by c(y) = 3y. = 1. Find the marginal revenue and marginal cost functions. 2. Find the optimal price and quantity for the monopolist. 3. Find the optimal price and quantity if the market is competitive. Note that in the competitive market firm produce where MC-AC. 1. Calculate the consumers surplus and deadweight loss of due to monopoly.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
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QUESTION 1 A. The total cost function for a monopolist is given by TC = 44,000 + 180Q + 0.03Q² and the demand function is P = 420 – 0.06Q per unit of output. i. What is the profit maximising level of output? ii. Calculate the profit maximizing price. iii. Calculate total profit at the profit maximising level of output.
Give typing answer with explanation and conclusion The inefficiency (dead-weight loss) of a monopoly (as compared to perfect competition) indicates the amount by which Group of answer choices price exceeds marginal revenue at a particular output level. consumer welfare is increased by the monopolist. price exceeds marginal cost at a particular output level. marginal benefits exceed marginal cost for those units not produced by the monopolist but that would otherwise be produced in a competitive market. marginal costs exceed marginal benefits for those units not produced by the monopolist but that would otherwise be produced in a competitive market.
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Please refer to the graph attached. The graph shows the Demand, Marginal Revenue, and Marginal Cost curves for a monopolist. (a) What would be the monopolist profit maximizing price and quantity? (b) If market was perfectly competitive what would be the equilibrium price and quantity? (c)Which area shows the total surplus under perfect competition?
Question No. 18 Refer to the Figure below. What price will the monopolist charge in order to maximize profit? 10 MC ATC 6. - AVC 3. MR 0 1 2 3 4 5 6 7 8 9 10 Quantity (units per day) Question No. 19 Refer to the above Figure in question 18. At the profit-maximizing what is price, output, and total revenue is? Question No. 20 Explain why only normal profit may be earned in the long run in perfect competition? Price(£ per unit)
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