7. Refer to the figure below: Revenue and cost per unit $30 24 22 20.80 20 18 B 62 E MC MR 83 104 ATC Demand Quantity Assume the monopolist maximises its profits. The amount of consumer surplus is: A) $21. B) $124. C) $186. D) $332.
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- Imagine that you ale managing a small firm and thinking about entering the market of a monopolist. The monopolist is currently charging a high price, and you have calculated that you can make a nice profit charging 10 less than the monopolist. Before you go ahead and challenge the monopolist, what possibility should you consider for how the monopolist might react?Price 30 MC 23 20 15 ATC D 9 12 15 \MR Quantity d) If a price ceiling of $17.50 is imposed by the government on the monopolist, estimate the quantity that the monopolist will produce based on the graph. What happens to the deadweight loss and why? (Note: no need to compute for the DWL.)3. Consider a monopolist who faces the following demand: Demand: P= 100 – 10Q MC= 50+20 a) Find the price quantity combination that maximizes profit for the monopolist. b) Is the firm making positive, negative or zero profits? (100,100) Kareem chooses (60, 105) (500, 400) Saleem chooses Kareem chooses (50,420) 4. Calculate the SPNE/SPNES for the game stated above.
- Refer to the graph shown of a profit-maximizing monopolist: $100 $90 MC $80 $70 $60 $50 Price, cost, revenue D 7000 14000 21000 12000 Question: What is the monopolist's economic profit(loss) at the profit-maximizing level of output? O-$280,000 O $0 $140,000 $840,000 O -$140,000 0 /AC MRExercise A.6 A monopolist facing the demand curve Q = 42 – 0.6P operates with constant average and marginal costs equal to 20. a) Calculate the quantity, price and profit obtained by the monopolist. Represent graphically. (b) What quantity, what price and what benefit will you get if you can apply first-degree price discrimination? Calculate the consumer surplus and represent graphically. c) The monopolist warns that he can separate consumers into two distinct groups with demands Q1 = 12 - 0.1P1 and Q2 = 30 - 0.5P2. Calculate the quantities, the prices you will set in each market, and the profit you will make. Represent graphically.Andrew is a monopolist whose production process exhibits economies of scale. (a) Draw a diagram illustrating Andrew's profit-maximizing price and quantity. On your diagram, identify the deadweight loss of monopoly. (b) The government is concerned that Andrew is charging too high a price and plans to regulate the price. Hustrate the price regulation you would recommend on your diagram and explain your recommendation. (c) What is the maximum amount of money Andrew would be willing to spend lob- bying the government to avoid the price regulation you identified in (b)? 2.
- 28 $55 $50 $45 MC АТС I of $40 $35 $30 $25 $20 Demand = P $15 $10 $5 $0 MR 40 80 120 160 200 240 Output (Q) The diagram above shows the Demand, MR, and cost curves for a monopolist in the short-run. At the profit maximizing Output (Q) level, the monopolist will earn a Total Profit of: Sel one: а. $1,200 b. $2,200 c. $800 d. $2,000 $$E3 Let’s assume a monopolist has the following inverse demand curve:p = 248 −3qand the following cost curve:T C = 8q + q^2(a) Calculate the marginal revenue and marginal cost for this firm.(b) Let’s assume the firm chose to operate in a perfectly competitive market. If that was true,what is the equilibrium price and quantity?(c) Graph the demand curve, marginal revenue, and marginal cost for the perfectly competitivemarket. Show the optimal quantity and price on the graph.(d) Calculate the consumer surplus, producer surplus, and deadweight loss in this market.(e) Now, let’s assume the firm chose to operate as a monopolist. If that was true, what is theequilibrium price and quantity?(f) Graph the demand curve, marginal revenue, and marginal cost for the monopolist market.Show the optimal quantity and price on the graph.(g) Calculate the consumer surplus, producer surplus, and deadweight loss in this market.DAU BAUGO BA ECO2066 (2) Mathem... Overview Plans Resources Follow-up and reports Participants More Question 1 Given a monopolist which has identified two submarkets of buyers for its product with demand schedules: Q, = 400- 4P, and Q2 = 300 - 5P, The total cost curve of the monopolist is C(Q)- 20Q + 100 Q = Q1 + Q2 • Determine the profit maximizing outputs and prices in the two submarkets and the total profits of the monopolist under price discrimination. Calculate the price elasticity of demand in each submarket at the profit maximizing output levels. • Determine the profit maximizing output, price and profit if the monopolist does not practice price discrimination. Your answer: BIU A- A- Q = S : x, x" OG临向? Font Size HE 10:20 23°C Kismen güneşli A O TUR 21.06.2021 41W PriSc Ineert Deleie F1 101 7 ( 8.
- B) The table below shows the information on quantity, price and cost of a monopolist. Assume that the fixed cost is $20, Quantity Price Total Variable Cost 10 $9 $20 20 8 $60 30 $7 $120 40 S6 $200 50 $5 $300 60 $4 $420 Determine the optimal output of the firm and compute the profit or loss of the firm at the optimal output. At what price will the monopolist exit from the industry?O 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 14 151. 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.
