Assignment 9 Question 1 A monopolistic producer of two goods, G, and G2, has a joint total cost function TC = 5Q1 + Q1Q2+5Q2 Where Q1 and Q2 denote the quantities of G1 and G2 respectively. If P, and P2 denote the corresponding prices then the demand equations are P = 40 – Q1 + Q2 P2 = 20 + 2Q1 – Q2 a) Find the total revenue function for each good b) Find the profit function for the firm c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either type d) Find the price that the firm is supposed to charge for each good. e) Estimate the new optimal profit if the production quota increases to 15 unit

Assignment 9 Question 1 A monopolistic producer of two goods, G, and G2, has a joint total cost function TC = 5Q1 + Q1Q2+5Q2 Where Q1 and Q2 denote the quantities of G1 and G2 respectively. If P, and P2 denote the corresponding prices then the demand equations are P = 40 – Q1 + Q2 P2 = 20 + 2Q1 – Q2 a) Find the total revenue function for each good b) Find the profit function for the firm c) Find the maximum profit if the firm is contracted to produce a total of 12 goods of either type d) Find the price that the firm is supposed to charge for each good. e) Estimate the new optimal profit if the production quota increases to 15 unit

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter10: Prices, Output, And Strategy: Pure And Monopolistic Competition

Section: Chapter Questions

Problem 8E

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Only typed answer and don't use chatgpt otherwise I will downvote the answer Reference: Ref 11-2 (Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC'. Suppose further that after the innovation reduced the cost to ATC', it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be: a. $1,190. b. $3,400. c. $1,700. d . $3,060.
Lefola Limited is the only manufacturer of product G_Easy in the Popa Land. It has provided documented levels of demand at certain selling prices for product G_Easy which are as follows: Price per unit Demand Units Total costs 7 000 0 3 000 6 000 1 5 000 5 000 2 8 000 4 000 3 12 000 3 000 4 17 000 2 000 5 23 000 1 000 6 30 000 Required: Using a tabular approach, calculate the marginal revenues and marginal costs for product G_Easy at the different levels of demand, and so determine the selling price at which Lefola Limited’s profits are maximized.
Q. 4 The following total cost (TC) relation holds in both short run and long run for a monopolistically competitive firm TC=100+3Q+0.03Q^2 Where Q is the quantity of output TC function includes a risk adjusted normal rate of return on the firm’s investment In the short run, total revenue (TR) relation for this monopolistically competitive firm is given by: TR=11Q-0.01Q^2 Due to a high degree of product differentiation maintained by the firm, the firm demand curve in the long run is a parallel shift of its short-run demand curve. To maximise total profit in the short run, the firm should produce ___________ units of output ; To maximise total profit in the long run, the firm should produce _________ units of output. a.50;100 b. 100;50 c.100;58 d. 50;58
1.Amalgamated Popcorn, Inc. sells bags of flavored gourmet popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 -800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. a) Compute the store’s price elasticity and advertising elasticity. b) Check whether your current $1.50 price is profit maximizing. If not, determine the store’s optimal quantity and price. c) Should the store consider increasing its advertising spending? Why or why not.
The Poster Bed Company believes that its industry can best be classified as monopolistically competitive. An analysis of the demand for its canopy bed has resulted in the following estimated demand function for the bed:P = 1760 - 12QThe cost analysis department has estimated the total cost function for the poster bed asTC = (1/3)Q3 - 15Q2 + 5Q + 24,000a. Calculate the level of output that should be produced to maximize short-run profits. b. What price should be charged? c. Compute total profits at this price-output level. d. Compute the point price elasticity of demand at the profit-maximizing level of output. e. What level of fixed costs is the firm experiencing on its bed production? f. What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated?
Please no written by hand solutions BCPC 208: QUANTITATIVE METHODS ASSIGNMENT 8 1. A firm is a monopolistic producer of two goods G_{l} and G_{2} The prices are related to quantities Q_{1} and Q_{2} according to the demand equations P_{1} = 50 - Q P_{2} = 90 - 2O_{2} If the total cost function is TC = Q_{1} ^ 2 + 2Q_{1}*Q_{2} + Q_{2} ^ 2 (a) Determine the firm's profit function, (b) Find the values of Q_{1} and Q_{2} which maximises profit by applying first and second order conditions. (e) Find the maximum profit and deduce the prices that maximises profit 2. A monopolistic producer of two goods, G_{1} and G_{2} has a joint total cost function TC = 5Q_{1} + Q_{1}*Q_{2} + 5Q_{2} where Q_{1} and Q_{2} denote the quantities of G_{1} and G_{2} respectively. If P_{1} and P_{2} denote the corresponding prices, then the demand equations are Q_{1} = 40 - P_{1} + Q_{2} Q_{2} = 20 + 2Q_{1} - P_{2} (a) Find the total revenue function for each good. (b) Find the profit function for the firm (c)…
Assume a firm engaging in selling its product and promotional activities in monopolistic competition face short-run demand and cost functions as Q = 20-0.5P and TC= 4Q2 -8Q+15, respectively. Having this information a) Determine the optimal level of output and price in the short run. b) Calculate the economic profit (loss) the firm will obtain (incur). c) Show the economic profit (loss) of the firm in a graphic representation.
1. Two firms compete in a market to sell a homogeneous product with inversedemand function P = 960-6Q. Each firm produces at a constant marginal cost of$60 and has no fixed costs.c. Assuming the firms collude and act as a monopolist, computei. Equilibrium price and quantityii. Total profitsiii. Consumer surplusiv. Total welfare loss relative to perfect competition (if any)
True / False4. Advertising must be socially wasteful because advertising simply adds to the cost of producing a product.5. In the long run, firms in monopolistically competitive markets produce at the minimum of their average total cost curves.
Happy Bubble Tea, Inc., which has been given a limited license, runs a network of bubble tea shops in Country A. Under the current business model, Happy Bubble Tea, Inc.'s marginal cost and average total cost per cup are both $16. This company's inverse demand function is P = 40 - 0.004Q. 1(a) With the aid of a diagram, calculate the profit-maximising level of output and price and profit. 1(b) What procurement method will you suggest Happy Bubble Tea to purchase the tea bags it used for making its bubble tea from its suppliers? Explain.
Q31 Plaex Building Systems Inc., a startup firm based in Hampstead, New Brunswick, is monopolistic firm with a sales schedule such that it can sell 22 prefabricated platics garages per week at $1,950 each, but if it restricts its output to 21 per week it can sell these at $2,000 each. The marginal revenue of the 22nd unit of sales per week is Multiple Choice $42,900. $1,950. $900. $432. $2,000.
Exotic Metals, Inc., a leading manufacturer of beryllium, which is used in many electronic products, estimates the following demand schedule for its product. Find the total revenue and marginal revenue schedules for the firm and complete the following table. Price Quantity Total Revenue Marginal Revenue ($/Pound) (Pound/Period) ($/Period) ($/Period) 25 0 0 18 1,000 18,000 18.00 16 2,000 14 3,000 12 4,000 10 5,000 8 6,000 6 7,000 4 8,000 2 9,000 Fixed costs of manufacturing beryllium are $14,000 per period. The firm’s variable cost schedule is as follows: Determine the average total cost and marginal cost schedules for the firm and complete the following table. Output Variable Cost Total Cost Marginal Cost (Pound/Period) (Per Pound) ($/Period) ($/Period) 0 0 0 1,000 10.00 24,000 24.00 2,000 8.50 3,000 7.33 4,000…