4. 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. (LO3, LO4)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?6. The accompanying diagram shows the demand, marginal revenue, and marginal cost of a monopolist. (LO1, LO3, LO5)a. Determine the profit-maximizing output and price.b. What price and output would prevail if this firm’s product were sold by price-takingfirms in a perfectly competitive market?c. Calculate the deadweight loss of this monopoly.8. The elasticity of demand for a firm’s product is –2.5 and its advertising elasticity of demand is 0.2. (LO8)a. Determine the firm’s optimal advertising-to-sales ratio.b. If the firm’s revenues are $40,000, what is its profit-maximizing level of advertising?9. A monopolist’s inverse demand function is P = 150 − 3Q. The company produces out- put at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. (LO1, LO8)a. Provide the equation for the monopolist’s marginal revenue function. (Hint: RecallthatQ1 +Q2 =Q.)b. Determine the profit-maximizing level of output for each facility.c. Determine the profit-maximizing price. 4. You are the manager of a monopoly, and your demand and cost functions are given byP = 300 – 3Q and C(Q) = 1,500 + 2Q², respectively. (LO3, LO4)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-quantitycombination?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-quantitycombination?5. You are the manager of a firm that produces a product according to the cost functionC(q) = 160 + 58q; – 6q² + q?. Determine the short-run supply function if: (LO1, LO7)a. You operate a perfectly competitive business.b. You operate a monopoly.c. You operate a monopolistically competitive business.6. The accompanying diagram shows the demand, marginal revenue, and marginal cost ofa monopolist. (LO1, LO3, LO5)a. Determine the profit-maximizing output and price.b. What price and output would prevail if this firm's product were sold by price-takingfirms in a perfectly competitive market?c. Calculate the deadweight loss of this monopoly.$120MC110100908070605040302010MRQuantity1237.8.9 10 11 12 13 14 157. You are the manager of a monopolistically competitive firm, and your demand and costfunctions are given by Q = 36 – 4P and C(Q) = 4 + 4Q+ Q². (LO1, LO3, LO5)a. Find the inverse demand function for your firm's product.b. Determine the profit-maximizing price and level of production.c. Calculate your firm's maximum profits.d. What long-run adjustments should you expect? Explain.8. The elasticity of demand for a firm's product is -2.5 and its advertising elasticity ofdemand is 0.2. (LO8)a. Determine the firm's optimal advertising-to-sales ratio.b. If the firm's revenues are $40,000, what is its profit-maximizing level of advertising?9. A monopolist's inverse demand function is P = 150 – 3Q. The company produces out-put at two facilities; the marginal cost of producing at facility 1 is MCQ1) = 6Q1, andthe marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. (LO1, LO8)a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recallthat Q1 + Q2 = Q.)b. Determine the profit-maximizing level of output for each facility.c. Determine the profit-maximizing price.

Question

4. 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. (LO3, LO4)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?6. The accompanying diagram shows the demand, marginal revenue, and marginal cost of a monopolist. (LO1, LO3, LO5)a. Determine the profit-maximizing output and price.b. What price and output would prevail if this firm’s product were sold by price-takingfirms in a perfectly competitive market?c. Calculate the deadweight loss of this monopoly.8. The elasticity of demand for a firm’s product is –2.5 and its advertising elasticity of demand is 0.2. (LO8)a. Determine the firm’s optimal advertising-to-sales ratio.b. If the firm’s revenues are $40,000, what is its profit-maximizing level of advertising?9. A monopolist’s inverse demand function is P = 150 − 3Q. The company produces out- put at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. (LO1, LO8)a. Provide the equation for the monopolist’s marginal revenue function. (Hint: RecallthatQ1 +Q2 =Q.)b. Determine the profit-maximizing level of output for each facility.c. Determine the profit-maximizing price. 4. You are the manager of a monopoly, and your demand and cost functions are given byP = 300 – 3Q and C(Q) = 1,500 + 2Q², respectively. (LO3, LO4)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-quantitycombination?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-quantitycombination?5. You are the manager of a firm that produces a product according to the cost functionC(q) = 160 + 58q; – 6q² + q?. Determine the short-run supply function if: (LO1, LO7)a. You operate a perfectly competitive business.b. You operate a monopoly.c. You operate a monopolistically competitive business.6. The accompanying diagram shows the demand, marginal revenue, and marginal cost ofa monopolist. (LO1, LO3, LO5)a. Determine the profit-maximizing output and price.b. What price and output would prevail if this firm's product were sold by price-takingfirms in a perfectly competitive market?c. Calculate the deadweight loss of this monopoly.$120MC110100908070605040302010MR>Quantity1237.8.9 10 11 12 13 14 157. You are the manager of a monopolistically competitive firm, and your demand and costfunctions are given by Q = 36 – 4P and C(Q) = 4 + 4Q+ Q². (LO1, LO3, LO5)a. Find the inverse demand function for your firm's product.b. Determine the profit-maximizing price and level of production.c. Calculate your firm's maximum profits.d. What long-run adjustments should you expect? Explain.8. The elasticity of demand for a firm's product is -2.5 and its advertising elasticity ofdemand is 0.2. (LO8)a. Determine the firm's optimal advertising-to-sales ratio.b. If the firm's revenues are $40,000, what is its profit-maximizing level of advertising?9. A monopolist's inverse demand function is P = 150 – 3Q. The company produces out-put at two facilities; the marginal cost of producing at facility 1 is MCQ1) = 6Q1, andthe marginal cost of producing at facility 2 is MC2(Q2) = 2Q2. (LO1, LO8)a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recallthat Q1 + Q2 = Q.)b. Determine the profit-maximizing level of output for each facility.c. Determine the profit-maximizing price.

Accepted Answer

4. P=300-3Q
C=1500+2Q2
a. To maximize the profits, the monopolist will produce at a point where…