is equal to -4. The firm's marginal cost is 25. Express the firm's marginal revenue as a function of its price then determine the profit-maximizing price.
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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?How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?A Texas firm sells lead pipe in Saudi Arabia and in Britain. The price elasticity of demand is more elastic in Britain than in Saudi Arabia. If the firm is a price discriminating monopolist, in which country is the price likely to be higher? A. Price will be the same in both countries B. Elasticity is irrelevant O C. Saudi Arabia D. Britain
- Bill’s Bicycle is the monopoly seller of bicycles in the city where it operates.The demand function of bicycles is Q = 200 - 10P. The company’s total cost func-tion is C = 10 + 10Q. Assume the company charges a single, uniform price forevery bicycle it sells. a. Calculate the profit-maximizing quantity and price for Bill’s BicycleCompany.b. The government decides to impose a specific tax on bicycles in thiscity. The amount is τ=2 per bicycle sold and is collected from the seller. Drawa diagram that show the deadweight loss before the imposition of the tax andthe deadweight loss after the imposition of the tax.(You do not need to shownumerical values in the diagram as long as all the areas are labelled correctly).Define the income elasticity of demand What is a normal and an inferior good? Define the cross-price elasticity of demand Compare and contrast monopoly and perfect competition market structure in long-run.Draw the graph. If the monopoly is a doing perfect price discrimination, then: 1. the monopoly produces a quantity Q = ______ where ________________ (which curves intersect?)2. the monopoly charges a price of ________ (trick question!!!!)3. the consumer surplus is CS = ______. 4. the producer surplus is PS = _________(identify the area on the graph and calculate it).5. this monopoly ________ (is / is not) efficient because ______________________.
- 2 A monopoly sells its goods in the United States, where the elasticity of demand is -2, and in Japan, where the elasticity of demand is -5. Its marginal cost is $10. At what price does the monopoly sell its goods in each country if resale is impossible?13. A monopoly’s price is $20. At this price the absolute value of the elasticity of demand is 2. What is the monopoly’s MC?5. The demand equation of a monopoly firm is: P = 146 – 3Q²and the marginal cost is: MC = 4Q + 12, then find the total revenue and consumer's surplus.
- 2. A monopoly sells its good in Country A, where the elasticity of demand (in absolute value) is 2, and in Country B, where the elasticity of demand (in absolute value) is 3. Its marginal cost is $20. Determine what price does the monopoly sells its good in each country if the monopolist is able to price discriminate. How and why does the price depend on the elasticity of demand?C Monopoly Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $4 per unit. Tanya’s business can be considered a monopoly. The fixed cost is $2. Price Quantity $15 0 $12 1 $9 2 $6 3 $3 4 $1 5 1. Determine Tanya's profit-maximizing level of output? Explain how you know. 2. Calculate profit and demonstrate your methodHot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Calculate Hot Air's profit-maximizing output and price. Calculate the economic profit. Hot Air's profit-maximizing number of rides is 3 a month and the profit-maximizing price is $160 a ride. >>> Answer to 1 decimal place. C Price (dollars per ride) 220 200 180 160 140 120 Quantity (rides per month) ܘ ܝ ܚ ܚ ܟ ܗ 2 3 4 5 Total cost (dollars per month) 80 160 280 440 640 880