d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the same set of axes. Make sure to label all intercepts, lines and axes. i. Indicate where the profit-maximizing price and quantity are. ii. Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and calculate the numerical value of each of these. [Area of a triangle: 2 * Base * Height]
d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the same set of axes. Make sure to label all intercepts, lines and axes. i. Indicate where the profit-maximizing price and quantity are. ii. Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and calculate the numerical value of each of these. [Area of a triangle: 2 * Base * Height]
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.7P
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Solve d
![1. The demand function in a market given by p(X) = 100 – X, where X is the industry output.
Campbell is a monopolist facing marginal cost c = 1.
%3D
a. Calculate the monopoly output that Campbell produces?
b. What is the monopolist price that Campbell charges?
c. What is the total profit that Campbell earns?
d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the
same set of axes. Make sure to label all intercepts, lines and axes.
i.
Indicate where the profit-maximizing price and quantity are.
ii.
Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and
calculate the numerical value of each of these. [Area of a triangle: 2* Base * Height]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f00649e-178c-40ad-8fe9-fa1944145569%2F7870604f-dd0f-4d1e-be01-da2afff69559%2Fp3w91wk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. The demand function in a market given by p(X) = 100 – X, where X is the industry output.
Campbell is a monopolist facing marginal cost c = 1.
%3D
a. Calculate the monopoly output that Campbell produces?
b. What is the monopolist price that Campbell charges?
c. What is the total profit that Campbell earns?
d. Sketch Campbell's inverse demand curve, marginal revenue and marginal cost curve on the
same set of axes. Make sure to label all intercepts, lines and axes.
i.
Indicate where the profit-maximizing price and quantity are.
ii.
Shade/label the areas for total cost, total profit, consumer surplus and deadweight loss and
calculate the numerical value of each of these. [Area of a triangle: 2* Base * Height]
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