The quantity demanded, Q, of a monopolist’s product is a function of price, P, as given by the equation Q = 50 – P. If currently P = 40 and Q = 10, what is the marginal revenue (MR) associated with adding one more unit of output? a. –$29 b. –$31 c. $31 d. $1 e. $29
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- 1. A manufacturer estimates that D(p)=3000e0.05p units of a particular good will be sold at market price of p cedis per unit. Determine the market price that will result in marginal revenue of zero. 2. A manufacturer estimates that q = 800/30 – p units of a commodity are demanded when cedis per unit are charged. a. Express the price elasticity of demand as function of p . b. Calculate the price elasticity of demand when p=10. Interpret the result. c. Find the price at which the price elasticity of demand is unit-elastic. 3. An auto maker estimates that when q units of its saloon cars are sold in a day, its profit in millions of cedis is modelled as P(q) =100+25In 20 Find the 2 number of cars that should be produced and sold to maximise profit.Consider a monopoly firm producing laptops. Below are the equations describing this firm's economic conditions. Demand: Q = 10 – P Marginal Revenue: MR= 10 – 2Q Total Cost: TC = 4 + Q + 0.5Q² || Marginal Cost: MC=1+Q Choose all correct statements. The produced quantity is 3. В. The price charged is 6. n C. The profit this monopoly firm can make is 9.5. D. None of above is correct.a. b. If a firm's the price elasticity of demand (Eg) to be-3.5 and marginal cost (MC) is $15. Using the mark-up rule, what is the optimal price for the firm to charge? If the price elasticity of demand (En) changes to -3.0, and MC is still $15. Use the mark-up rule to find the new optimal price for the firm to charge? What is the defining feature of a Pure Selling Problem and what impact does it have one the firm's goal to maximize profit?
- 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)Suppose a monopolist faces the demand curve and cost curves shown on the right. If the monopolist is practicing perfect price discrimination and is maximizing its profits, the total revenue is represented by the area OA. OP ₂bQ₂ OB. OP 5bQ₂ OC. OP ₂aQ OD. OP,dQ,. O E. OP₂CQ 10 P5 aaaa P4 P3 Dollars P₂ P₁ Por CA MC/ 'b de ATC QjQ₁ Q₂ Qz Quantity Demand NI MR Q4 Q5 11 OUBill’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).
- Seema can sell 10 sweaters for $70 each, 20 sweaters for $60 each, 30 sweaters for $50 each, 40 sweaters for $40 each, and 50 sweaters for $30 each. Her marginal cost of production is constant at $30 for each additional unit (or sweater) produced. If she behaves like a monopolist, what is the number of sweaters she will sell? a. 20 b. 30 c. 40 d. 50O OO The above graph shows the market demand function for a product. Assume that the market is served by a perfectly-price-discriminating monopolist with a constant marginal cost of production equal to $4 (MC = $4) and no fixed cost (FC = 0). The deadweight loss equals: DWL - $72 DWL - $0 DWL- -$48 DWL - $84 DWL-$36 $30 $28 $26 $24 $22 $20 Question 23 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Define 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.
- a. Given the following demand functions for two market segments (in millions) P1 = 440 – 8Q1 P2 = 160 – 5Q2 TC = 500 +40Q Calculate the profit maximizing Quantities & corresponding Prices and profit level. Based on demand elasticities demonstrated that this monopolist is making use of the concept in its pricing strategy. b. Explain the reasoning behind the fact that a firm in a perfectly competitive market may continue to produce and sell its products at a loss within the short run but might not opt to do so in the long run. c. What factors in your view are behind monopoly power within markets and what in your view limits monopoly power within markets?19. Firm A is monopolist in x market, and it consumes one unit of y in order to produce one unit of x. It costs 5 + py TL to produce one unit of x. (py is the price of product y.) y is produced by a monopolist, B, and it costs 5 TL to produce one unitf of y. The demand for x is defined by px = 50-qx (px product price, qx quantity demanded). a) Assume that px is set by Firm A and py is set by Firm B. What would be the equilibrium prices for products x and y? Calculate Firm A and B's profits. b) Assume that Firms A and B merge together. What would be the equilibrium prices for products x and y? Calculate the profits of the new firm. c) Would the merger between A and B increase the consumer surplus? Why (not)?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.