In a market demand and supply equations are: The demand curve is given as P = 900 - 10Q The supply curve is given as P = 300 + 20Q 2) Assume a monopoly condition for the above market. a) What are the monopoly market price and quantity? b) What is the consumer surplus? c) What is producer surplus?
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In a market
The demand curve is given as P = 900 - 10Q
The supply curve is given as P = 300 + 20Q
2) Assume a monopoly condition for the above market.
a) What are the
b) What is the consumer surplus?
c) What is
d) What is the total wealth?
e) What is the
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- A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per unit. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?e) How would the $1,000 per day tax affect its output per day?f) How would the $1,000 per day tax affect its profit per day?g) Now suppose a tax of $100 per unit is imposed. How will this affect the firm’s price?h) How would a $100 per unit tax affect the firm’s profit maximizing output per day?i) How would the $100 per unit tax affect the firms profit per day?Assuming that the firm is the only producer in a market, the social cost of the output decision of a profit-maximizing monopoly firm. Can you discuss the assumption that the government forces the monopoly firm to lower its price? Would it be possible to show how the output of the firm would increase? Thank you!With the aid of a graphical illustration, explain the deadweight loss from monopoly power. It is argued that the social cost of monopoly power may exceed the deadweight loss. Explain why this might be the case.
- Assume the following equations describe the conditions for a monopoly: Qd = 2,000 - 100P TC = 3,500 + 5q + .005q2 Where Qd is the quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions: a. What is the firm's equation for total revenue expressed as a function of quantity? b. What is the firm's equation for marginal revenue expressed as a function of quantity? What is the firm's equation for marginal cost expressed as a function of quantity? c. What is the firm's profit maximizing quantity of output? d. What price will the firm charge for the commodity? e. What would be the socially optimal quantity of output? f. What price would regulators have to establish in order to have the firm produce the socially optimal quantity of output?An economist was trying to understand the relation between price, Marginal Revenueand Marginal cost in Monopoly and Perfect Competition. Determine equilibrium priceand output in the long run under Monopoly and Perfect Competition if the marketdemand curve is given as QD=500-2P and Marginal cost is Rs 50. Also comment onthe values obtained in the case of Monopoly and Perfect CompetitionLet be a monopoly whose total cost function is such that C(Q) = 2Q. The (inverse) demand in this market is given by P(Q) = 16 - Q. Which one is right ? a. If the monopoly maximizes its profit, Dead load of the monopoly is 32.5 b. If the monopoly maximizes its profit . Dead load of the monopoly is 24.5 c. If the monopoly maximizes its profit. Dead load of the monopoly is 35 d. None of these statements is correct e. If monopoly maximizes its profit The dead load of monopoly is 28.5
- Given the total cost function TC = Q2 + 100 and the inverse demand function P = 120 – Q faced by a monopoly. If the government imposes a specific tax of 20 per unit of output, a. Calculate the profit-maximizing output, price level, the profit of the monopoly, and the tax revenue generated by the government b. Graphically illustrate the change in consumer surplus and deadweight loss due the imposition of the tax. Also indicate the values computed in part a in your illustrationA monopoly producer of music videos sells them to TV stations and to individual consumers. BecauseTV stations have special formatting and quality requirements, producers can separate these two markets and sellessentially the same product at two different prices. You are given the following demand curves per year for thesedistinct markets:TV stations: P1 = 80 - 0.01Q1Individual consumers: P2 = 60 - 0.01Q2where P refers to prices charged to each group and Q refers to quantities demanded by each group. The variable costof producing music videos (once the video has been shot) is uniform at €4 per video. In addition, there are sunk fixedcosts of €20,000 for the shooting of each music video (for design, promotion and hiring artists).3.1. If the producer of music videos can price discriminate by charging different prices to each group, determine theprofit-maximizing price charged to TV stations and to individual consumers.3.2. Assume now that the monopoly producer of music videos is unable to…A market analysis employed by the “Sad Student Company” reveals that the number oflots of the game named “Handsome Killer: Revenge of the Teacher” ordered by thewholesalers when the game is offered at a price of dollars per lot is given by the formula:p=1500-2.5qa) Find the company’s total, marginal and average revenues b) Find the price and quantity maximizing the total revenue by first expressing therevenue as a function of price rather than of quantity
- A monopolist produces a certain good. The cost c for producing this good is given by c = 20q, whereq is the quantity produced. The (inverse) demand function for this product is given by p = 30 − 0.01q,where p is the price per unit of the product. We assume that the full produced quantity is sold. Thegovernment taxes the sales of the good and would like to maximize the received tax T .Suppose in first instance that the government introduces a tax of 4 monetary units per unit of theproduct sold. We determine how much the government then receives.The demand curve P=120-Q is what a monopolist deals with. The marginal cost and marginal revenue curves for the monopolist are shown by the equations MC=2Q and MR=120-2Q, respectively. How much deadweight is lost as a result of monopoly?30200300150Note: Answer from d-i A monopoly firm faces a demand curve given by the following equation: P = $500 − 10Q, where Q equals quantity sold per day. Its marginal cost curve is MC = $100 per day. Assume that the firm faces no fixed cost. You may wish to arrive at the answers mathematically, or by using a graph (the graph is not required to be presented), either way, please provide a brief description of how you arrived at your results. d) Suppose a tax of $1,000 per day is imposed on the firm. How will this affect its price?e) How would the $1,000 per day tax its output per day?f) How would the $1,000 per day tax affect its profit per day?g) Now suppose a tax of $100 per unit is imposed. How will this affect the firm’s price?h) How would a $100 per unit tax affect the firm’s profit maximizing output per day?i) How would the $100 per unit tax affect the firms profit per day?