(g) Let demand for car batteries be such that Q = sume constant marginal costs of 15. Compute tl price, quantity, consumer surplus, producer surpl vant deadweight loss for: i. A perfectly competitive firm ii. A monopoly
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- Suppose the market for Hula Hoops is monopolized by a single firm. a. Draw the initial equilibrium for such a market. b. Now suppose the demand for Hula Hoops shifts outward slightly. Show that, in general (contrary to the competitive case), it will not be possible to predict the effect of this shift in demand on the market price of Hula Hoops. c. Consider three possible ways in which the price elasticity of demand might change as the demand curve shifts: It might increase, it might decrease, or it might stay the same. Consider also that marginal costs for the monopolist might be increasing, decreasing, or constant in the range where MR=MC Consequently, there are nine different combinations of types of demand shifts and marginal cost slope configurations. Analyze each of these to determine for which it is possible to make a definite prediction about the effect of the shift in demand on the price of Hula Hoops.How is the perceived demand curve for a monopolistically competitive film different from the perceived demand curve for a monopoly or a perfectly competitive film?Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the monopolists profit-maximizing output level. Now, think about a slightly higher level of output (sayQ0+1). According to the graph, is there any consumer willing to pay more than the marginal cost of that new level of output? If so, what does this mean?
- We are given an inverse market demand curve: P = 300 – 0.00006Q and the total cost of production. Assume that the total cost of production is the same for the entire market and the monopolist TC = 11,000,000 + 0.0006Q Explain how the market outcomes of perfect competition and monopoly differ for the given market. Use both mathematical and graphical method. Point out consumer and producer surplus, and total welfare ( No need of diagram )Solve for part d, e and f. Larry holds a monopoly in the market for pies, with no fixed costs and a constant marginal cost of c = 24. Moe, Curly, and Shemp are the three consumers who have the individual demand curvesq1(p) = 30 - p/ 2, q2(p) = 20 - p/ 3, q3(p) = 10 - p/ 6 a) Find the competitive equilibrium price Pc and quantity Qc. How many pies Qci does each consumer buy? b) Find the surplus to consumers CSc and producers PSc in the competitive equilibrium. How much surplus CSci goes to each consumer? c) Suppose that Larry must charge a single price for all pies. Find his monopoly price Pm and quantity Qm. How many pies Qmi does each consumer buy? d) Suppose that Larry is a first-degree price discriminator, who charges a different price for each pie consumed. Find the quantity qI as well as the surplus to consumers CSI and producers PSI. How much qIi does each consumer buy and what surplus CSIi does each receive? e) Now suppose that Larry is a second-degree price discriminator who…COURSE: MICROECONOMICS - MONOPOLY We appreciate a perfect competition market where there is a predetermined limit number of firms with 20 total firms.Each has the cost function such that: CTi = qi2 + 4qi + 3 where qi indicates numbers of firms (i = 20) The demand in the market is: Q = 100 - 4pa) What is the individual supply of each firm? (answered)b) What is the supply of the whole industry? (answered)c) Obtain the market equilibrium (answered)In the case where a new firm intended to enter a monopolist's market:d) What kind of legitimate entry barriers can the firm face understanding the nature of the market it wishes to enter?e) What type of anticompetitive barriers could the firm already in the market present? NOTE: a), b) and c) for perfect competition have been already answered by a tutor; please answer d) and e) questions
- 2. The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is:P = 8 - 0.005Qdwhere P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output.a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw?b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh?c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…Are the following statements true or false? (D). A monopoly earns total revenue of $5000 when it sells 500 units of output and totalrevenue of $5400 when it sells 600 units of output. Thus, the marginal revenue of the600th unit is $9.(E). We call a market where there is only one buyer for a good or service a monopoly.(F). There are a few firms selling differentiated products in a monopolistically competitiveindustry.(G). When a demand curve is a downward sloping straight line, the slope of the marginalrevenue curve is twice as steep as the demand curve.Consider a duopoly market with 2 firms. Aggregate demand in this market is given by Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MCi = 20, i=A,B. Assume the firms compete a la Cournot. What are the equilibrium quantities? What is the total quantity supplied on this market? What is the equilibrium price in this market?
- 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)Assume that perfectly competitive industry can produce milk at a constant marginal cost of $2.00 per unit. When the industry is monopolized, the marginal cost of producing milk increase to $4.00 per unit . The market demand for Milk is given by: QD = 100 − 10P,1. Graph and explain the results. Make sure to include the consumer surplus, producersurplus, DWL, and profit maximizing quantity and price under monopolySuppose a monopoly has output and cost data as follow: Q P TC Quantity $ $ OO 60 60 1 58 100 2 57 136 3 56 168 4 55 200 5 54 235 6 53 276 7 52 322 8 51 372 9 50 429 10 49 490 What is the perfect competition equilibrium P&Q