A firm has an inverse demand curve of P = 30 - 3Q and a marginal cost curve MC= 6Q. Calculate the deadweight loss from market power at the firm's profit-maximizing level of output.
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A firm has an inverse demand curve of P = 30 - 3Q and a marginal cost curve MC= 6Q. Calculate the
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- A firm with market power faces the demand function q = 2,000- 40P. The firm's marginal cost function isMC(q) = 10 +0.002q.If the firm establishes a block pricing structure with two different prices, identify the two prices the firm will use to maximize producer surplus. Give your answers to two decimal places.P1=________P2=________Is there a deadweight loss if a firm produces the quantity of output at which price equals marginal cost?A firm with market power faces the demand function, q = 150 – 10P. The firm's marginal cost function is MC(q) = 2 + 0.1q. If the firm establishes a block-pricing structure with two prices, the lower price that the firm will use to maximize producer surplus is $____.
- Consider a monopoly with inverse demand given by P(q)=a-bq and cost function c(q)=cq, where a>c>0 and b>0 are parameters, and q is the quantity supplied by the monopoly. Find the monopoly’s profit-maximizing price and output, and calculate the output and the welfare loss compared to the competitive outcome.Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD Demand :P =1000-10Q Total Revenue : TR=1000Q-10Q2 Marginal Revenue: MR=1000-20Q Marginal Cost: MC=100+10Q Where Q indicates the number of copies sold and P is the price in Ectenian dollasrs. a. Find the price and quantity that maximize the company's profit b. Find the price and quantity that would maximize social welfare c. Calculate the deadweight loss from monpoly. d. Suppose in addition to the costs above. the director of the film has to be paid. The company is considering four options i. a flat fee of 2000 Ectenian dollars ii. 50 percent of the profits. iii. 150 Ectenian dollars per unit sold iv. 50 percent of the revenue. For each option, calculate the profit-maximizing price and quantity. Which if any of these compensation schemes would alter the deadweight loss from monopoly. Explain.The cost function of the fringe firms is TC(q) = 4q, their total capacity is K = 2 units. The dominant firm has TC(q) = q. The market demand is Q(P) = 20 – 2P. What is the fringe supply? What is the profit maximizing price for the dominant firm? with expl plz
- An upstream monopoly sells the good x to a downstream monopoly. The downstream monopoly uses this good as an input to produce its output y. The production function of the downstream monopoly is y = x. The downstream monopoly sells its output to final consumers whose aggregate demand curve is y = 12 − p. The upstream monopoly's cost function is c (x)=2x. 1. Find the quantity x the upstream monopoly sells to the downstream monopoly and the quantity y the downstream monopoly sells to the 1 final consumer. Find also the price k the upstream monopoly charges the downstream monopoly and the price p the downstream monopoly charges the final consumers. Compute the profits of each monopoly.The aggregate demand for a cup of coffee in Chicago for each day is given by q = 4,000 - 500 p, where p is the price of a cup of coffee. If the price is $4, then the market marginal revenue isThe movie distributor charges a movie theatre $4 per ticket to rent a movie. Suppose the theatre can seat a maximum of 200 people. The demand for the movie is different for the afternoon showing and for the evening showing. Based on the demand function P = 10 – Q/10 for the afternoon showing and P = 20 – Q/10 for the evening showing, the marginal-revenue function for the afternoon is MR = 10 – Q/5 and for the evening is MR = 20 – Q/5. a. Calculate the profit-maximizing price in the evening and the afternoon; also calculate how many tickets will be sold for each show. b. Suppose that the movie distributor now charges a flat fee of $1000 to show the movie regardless of the number of tickets sold. Will the movie theatre owner prefer this arrangement? Why or why not?
- You own a road resurfacing business called Rockit Asphalting services located in Kingston. You are the only reservicing business in Southern Tasmania. Therefore, you have a local monopoly. Your experience running the company for many years has taught you that market demand for your service can be described by the demand function: p = 20 − q. The cost function is c = q2. Therefore, marginal cost equals 2q. Quantity refers to square metre of road resurfacing. Note the Q denotes aggregate market demand and q denotes your production. Of course, if you are the only supplier than q = Q. Compute profit maximising price and output. Compute profits. The monopoly profit that you have been earning has attracted attention from another firm that will set up operations in Southern Tasmania and compete for market share. You are concerned with losing market share and profit. So, you offer the potential entrant the following deal. Both firms agree to maximise industry profits (joint…In a perfectly competitive market, one of the following answers is correct with respect to the demand curve for a perfectly competitive firm. Which one? Group of answer choices The perceived demand curve is downward sloping. The perceived demand curve for a perfectly competitive firm and a monopolist look the same. When price increases, quantity demanded from the firm will also decrease. The demand curve is flat.The marginal revenue for a perfectly competitive firm is equal to the marketprice. Why is this not the case for a monopolist?
