Let the inverse demand function and the cost function be given by P = 50 − 2Q and C = 10 + 2q respectively, where Q is total industry output and q is the firm’s output. a) First consider first the case of uniform-pricing monopoly, as a benchmark. Then in this case Q = q. Find out the firm’s profit, price and quantity.
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Let the inverse demand function and the cost function be given by P = 50 − 2Q and C = 10 + 2q respectively, where Q is total industry output and q is the firm’s output.
a) First consider first the case of uniform-pricing
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- You are the manager of a monopoly, and your demand and cost functions are given by P = 300 − 3Q and C(Q) = 1,500 + 2Q2, respectively. a. What price–quantity combination maximizes your firm’s profits? b. Calculate the maximum profits. c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? d. What price–quantity combination maximizes revenue? e. Calculate the maximum revenues. f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price–quantity combination?A firm faces a market demand curve given by: P = 100 - Q. Assume that the firm has a total cost given by: TC = Q2 - 60Q + 1,000. What are the price quantity combination that maximizes profit? Calculate the following in case of Perfect Monopoly and Perfect Competition? compare your results? a. What output level should the firm produce to maximize profit? b. What is the profit maximization price (P) for this firm? c. What is the firm's profit? d. What is the Consumer Surplus?You are the manager of a monopoly. A typical consumer’s inverse demand function for your firm’s product is P = 250 − 40Q, and your cost function is C(Q) = 10Q. a. Determine the optimal two-part pricing strategy. b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?
- Madison Gas and Electric (MGE) is a monopoly for electricity in the city. MGE has a cost function of C(Q) = 1/2Q^2 and faces market demand of Q = P^(-u), u > 1. (1) Calculate the price elasticity of demand. (I) What is the optimal market price as a function u? (iii) What is the markup as a function of u?You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 500 − 2Q and C(Q) = 2,500 + 2Q2, respectively. a. What price–quantity combination maximizes your firm’s profits? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units b. Calculate the maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? multiple choice 1 Elastic Inelastic Unit elasticYou are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 600 − 3Q and C(Q) = 2,000 + 2Q2, respectively. a. What price–quantity combination maximizes your firm’s profits? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units b. Calculate the maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? multiple choice 1 Unit elastic Inelastic Elastic d. What price–quantity combination maximizes revenue? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units e. Calculate the maximum revenues. Instructions: Round your response to the nearest penny (two decimal places). $ f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price–quantity…
- a) Suppose demand for a good was given as: P = 220 - 0.25Q and the marginal cost of producing the good was MC = 20. What price and output would result under pure monopoly? b) Referring to a): If marginal cost increased to MC = 30, what happens to price and output? b) True or False and Explain: If a pure monopolist makes excess economic profit in the short run they will sustain it in the long run.You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 200 − 2Q and C(Q) = 1,000 + 3Q2, respectively. a. What price–quantity combination maximizes your firm’s profits? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units b. Calculate the maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? multiple choice 1 Elastic Unit elastic Inelastic d. What price–quantity combination maximizes revenue? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units e. Calculate the maximum revenues. Instructions: Round your response to the nearest penny (two decimal places). $ f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price–quantity…Consider a monopolist facing a direct demand function qd= 23-1/2 p. The firm's marginal cost is given by MC= 10-4q+q². a) Give a brief intuitive explanation of an indirect demand function. b) Find the indirect demand function from the specific direct demand function given above. c) Find the monopoly price and output. d) Calculate the producer and consumer surplus. Illustrate this graphically and discuss. e) Calculate the competitive price and output. Compare and contrast this to the monopoly outcome.
- You are the manager of a monopoly, and your analysts have estimated your demand and cost functions as P = 300-2Q and C(Q) = 1,500 + 2Q2, respectively. a. What price-quantity combination maximizes your firm's profits? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units b. Calculate the maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ c. Is demand elastic, inelastic, or unit elastic at the profit - maximizing price-quantity combination? multiple choice 1 Unit elastic Elastic Inelastic d. What price- quantity combination maximizes revenue? Instructions: Round your response to the nearest penny (two decimal places). Price: $ Quantity: units e. Calculate the maximum revenues. Instructions: Round your response to the nearest penny (two decimal places). $ f. Is demand elastic, inelastic, or unit elastic at the revenue - maximizing price-quantity combination? multiple choice 2 Unit elastic Elastic…Suppose the long-run marginal cost for a firm is given by MC= x^2 - 2x+5 , where x is the quantity supplied by the firm. Demand for the industry’s product is given by Q= 200-2p, where Q is quantity demanded and p is price. Consider two possibilities: (1) The industry is perfectly competitive ,or (2) the industry is an unnatural monopoly that operates at a single price. (a) What will the amounts of firm and industry output (x, Q) be under each form of industrial organization? (b) How much would a firm be willing to pay to obtain the right to act as a monopoly in this industry? Please show your work. (c) What is the dollar amount of deadweight loss from the monopoly? Please show work for each part.Consider a market with a common demand function given by Q = 100 - 2P, where Q represents quantity and P represents price. The total cost function for firms in this market is TC=1000+ 50². a) For a monopoly, calculate the profit-maximizing price, quantity, consumer surplus, producer surplus, and deadweight loss. b) Compare the monopoly equilibrium to the equilibrium in perfect competition. Calculate the price, quantity, consumer surplus, producer surplus, and deadweight loss under perfect competition. c) Use a single graph to illustrate both the monopoly and perfect competition equilibriums. 4