Suppose a monopolist faces consumer demand given by P=400 - 20 with a constant marginal cost of $40 per unit (where marginal cost equals average total cost assume the ferm has no fed costa). If the monopoly can only charge a single price, then it will eam profits of SEnter your response rounded as a whole number) Corespondingly, consumer surplus is $ However, f the fem were to practice price discrimination such that consumer surplus becomes profit then, holding output constant at 90, the monopoly would have profits of $

Suppose a monopolist faces consumer demand given by P=400 - 20 with a constant marginal cost of $40 per unit (where marginal cost equals average total cost assume the ferm has no fed costa). If the monopoly can only charge a single price, then it will eam profits of SEnter your response rounded as a whole number) Corespondingly, consumer surplus is $ However, f the fem were to practice price discrimination such that consumer surplus becomes profit then, holding output constant at 90, the monopoly would have profits of $

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
Imagine a monopolist could charge a different price to every customer based on how much he or she were willing to pay. How would this affect monopoly profits?
Suppose a monopoly market has a demand function in whichquantity demanded depends not only on market price (P) butalso on the amount of advertising the firm does (A, measuredin dollars). The specific form of this function isQ =(20 - P2) (1 + 0.1A - 0.01A2).The monopolistic firm’s cost function is given byC = 10Q + 15 + A.a. Suppose there is no advertising (A = 0). What outputwill the profit-maximizing firm choose? What market price will this yield? What will be the monopoly’sprofits?b. Now let the firm also choose its optimal level of advertising expenditure. In this situation, what output levelwill be chosen? What price will this yield? What will thelevel of advertising be? What are the firm’s profits in thiscase? Hint: This can be worked out most easily by assuming the monopoly chooses the profit-maximizing pricerather than quantity.
I need ans 3 In the next two problems, (1) and (2), consider a monopolist that maximizes profits and charges all consumers the same price. The inverse demand function is P = 100 – Q, where P is the price and Q is output. Calculate the deadweight loss to consumers (if any) and to the monopolist (if any). (1) Marginal cost is always zero. (2) Marginal cost is MC = Q. (3) Assume that every consumer has the inverse demand function P = 10 – Q and that marginal cost is always zero. There are 10 consumers. The monopolist wants to maximize profits by designing a two-part tariff. Calculate the two parts of the tariff, and calculate profits.
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