Assume a market demand curve Y(p)=3000-15p and a firm’s marginal cost is 60 (MC=60), For a monopolist, solve for the optimal quantity supplied and prevailing market price.
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Assume a market demand curve Y(p)=3000-15p and a firm’s marginal cost is 60 (MC=60),
For a monopolist, solve for the optimal quantity supplied and prevailing market
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- A monopolist faces a demand curve given by Qd = 270 – P and faces a short run total cost function given by TC = 30 + 3q2. (i) What is the output level that maximizes the firm's revenue?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…A different industry has a Demand curve given by Q = 800p -2 Assume that a monopolist supplies this industry. The cost function of this monopolist is c(Q)=2*Q. What is the price the monopolist charges? 0 0 What is the quantity the monopolist sells?
- A 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 mathA 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?The demand function of a commodity is P=10-3q and average cost function is AC=q,then calculate the equilibrium price, total revenue, total cost and total profit of a monopolist.
- Suppose the inverse demand function is linear: p(q) = a - Bq. The monopolist's cost function is c(q) = 6q2 . Assume the monopolist must charge a uniform price. (a) Find the optimum monopoly price and quantity. Also calculate the deadweight loss. (b) Suppose the government can levy a lump-sum tax T (i.e., a fixed amount independent of production) and an excise tax t per unit of production on the monopolist. These taxes can be negative, in which case they are subsidies. The proceeds of these taxes can be transferred to consumers. The monopolist is always free to quit the market, in which case she does not have to pay any taxes. The government wants to maximize the consumer welfare. Find the optimum values of t and T.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) 4500A monopolist produces output with the following (inverse) demand function: P=120-Q where P is the market price and Q is the market demand of a number of firms. The marginal cost of each firm is constant and the same (water and labor resources come from the same source) of 60. From these market conditions, calculate the change in company profits and social gains due to a decrease in marginal costs so that they become 35 after innovation.
- The demand function faced by a monopolist is D(p)= a-p and the cost function is C(q)=cq. 02 and it increases 2 The monopolist advertises to increase demand. The cost of advertising 0 is the demand by 0. The profit of the monopolist is (a-c) (a) 4 (a-c) (b) 2 (a-0) (c) 2 (a-0) (d) 4Consider a monopolistic market with demand function: P = 36 – 0.5Q The monopolist’s marginal cost (MC) and total cost (TC) function are: MC = $2 TC = 4 + 2Q How much total economic profit does the monopolist earn?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