Suppose the graph represent demand and marginal cost for a firm that is able to engage in perfect price discrimination. What is this firm's profit? $ Price and costs $50 45 40 35 30 25 20 15 10 5 D MC = ATC T 0 10 20 30 40 50 60 70 80 90 100 Downloads per hour
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- Sol-Motors is the only auto manufacturer in West Lidia, a country that prohibits the importation of cars. The graph below shows the demand and the costs for Sol-Motors. Costs and revenues (in thousands) 130 120 110 100 90 80 70 60 50 40 30 20 10 0 Price: $ 15. 45 75 9010512013550165180195 30 60 Quantity per period (in thousands) MC D thousands a. Add the marginal revenue curve to the graph above (starting at zero). Plot only the end points. b. What are Sol-Motors' profit-maximizing output and price? Output: thousands Tools MR K c. Suppose that the government of Lidia imposes a price ceiling of $35,000 per car. What is the firm's profit-maximizing output now? Profit-maximizing output: thousands d. What would be the output if the graph represented a perfectly competitive industry rather than a monopoly? Output: thousandsConsider a mature maket with a demand given by P=105.4-10Q The cost of production is given by C=10Q For many years this market has been served by a monopolist. How much profit would the firm lose if it is forced to behave as a competitive firm In all your calculations use numbers with 4 decimal places.Suppose the graph represent demand and marginal cost for a firm that is able to engage in perfect price discrimination. What is this firm's profit? 750 SA $ Price and costs $50 45 40 35 30 25 20 15 10 5 0 D MC = ATC 10 20 30 40 50 60 70 80 90 100 Downloads per hour
- Complete the table below Quantity TC TVC AFC ATC MC AVC 1 200 2 100 3 20 4 240 5 24 6 660 160 2. What conditions should exist for price discrimination?know how to plot graph and explain price discriminationPrice (Dollars per Garment) 7 D E 5 АС-МC Demand Marginal Revenue 20 Garments cleaned per year (millions) The long run average and marginal cost of dry-cleaning services is $5, as shown in the graph. Given the demand curve and the marginal revenue curve shown in the graph, which of the following is true? Select one: O . If the industry were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $7 per garment. Ob. If the industry were perfectly competitive, 10 million garments would be cleaned each year. If the market were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $5 per garment and monopoly economic profit would be zero. O d. If the industry were perfectly competitive then the long-run equilibrium price of dry-cleaning services would be $7 per garment.
- A publisher faces the following demand schedule for the next novel from one of its popular authors:Price Quantity Demanded100 090 100,00080 200,00070 300,00060 400,00050 500,00040 600,000 530 700,00020 800,00010 900,0000 1,000,000The author is paid $2 million to write the book, and the marginal cost of publishing the book is a constant $30 per book.d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author was paid $3 million instead of $2 million to write the book, how would this affectthe publisher’s decision regarding the price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economicefficiency. What price would it charge for the book? How much profit would it make at thisprice? (Consider the following table representing the market for a new PC game 'Fortnightly'. This game is produced exclusively by a software company called ECF1100 Pty Ltd, thanks to an exclusive copyright having been obtained by lobbying the government minister for industry and development - Mr Eco Stuff. Quantity of Price games 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 $200 $190 $180 $170 $160 $150 $140 $130 $120 $110 $100 $90 $80 Total cost $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 $550,000 $600,000 a) Using the table above roughly illustrate what the market demand, MC, ATC, and MR functions would look like (you must show the XY intercepts of the MR function b) Considering the 'monopoly' position, estimate what will be the equilibrium quantity and price of 'Fortnightly' games might be using the table provided earlier c) Using the data in the table provided earlier, how much would a firm be willing to spend in lobbying…Exhibit 9-5 Demand and cost data for a monopolist Price Quantity TR MR TC Profit $10 1 10 10 4 9 2 8 8 3 12 7 4 16 6 5 20 5 6 24 4 7 28 3 8 32 2 9 36 1 10 40 By calculating the data provided in Exhibit 9-5, how much is the profit if the firm decides to produce 7 units?
- MonoMed, having a Patent on production of a medicine, has following Demand and CostSchedule: Price (Rs ): 12 11 10 9 8 7 6 5 4 3 Quantity 0 1 2 3 4 5 6 7 8 9 TVC ( Rs ) 0 13 16 20 25 31 38 46 56 68 Where Fixed Cost is Rs 5 In a Table calculate TR, MR, TC, AVC, ATC and MC at each price. Plot the Demand, Marginal Revenue MR, Average Total Cost ATC, Average Variable Cost AVC and Marginal Cost MC Curves of the Firm in a clearly labelled graph. Calculate the profit earned, if any and show the area on the firm’s graph. How would you define the market structure of MonoMed? What are the characteristics? Does the firm have pricing power? E) What will be the impact of the firm on societal welfare? Would there be welfare loss as compared to a competitive firm? If so, briefly explain. Support your answer using MonoMed’s graph in (b) above.The graph below shows cost and revenue curves for a monopolistically competitive firm. Price $2.00 $1.75 $1.50 $1.25 $1.00 $0.75 $0.50 $0.25 0 20 40 60 MR Quantity It will charge a price of $ ATC MC D 80 100 120 140 160 This monopolist's profit-maximizing output level is on the x-axis.] units. [Watch for the scaleRefer to the graph shown. The equilibrium quantity for the monopolist represented is: MC Price $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 O OO O ATC MR 0 10 20 30 40 50 60 70 80 90 100 Quantity 100 50 30 70
