Monopoly. A monopolist sells to a population of consumers with willingness to pay that is uniform between 5 and 10. That is: f1/5 if 5 5 z S 10 S(w) = (0 else You can assume the amount of consumers is normalized to 1 like in class. The monopolist has constant marginal cost e.
Q: A monopolist facing a demand p = 1000 -10Q has costs TC(Q) = 5Q2 + 100Q (a) Calculate the…
A: Since (b) is incomplete, we shall only answer (a). Please resubmit the other part correctly in case…
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A: Assuming the equation to be: Q1 = 55 − P1 P1 = 55-Q1 Q2 = 70 − 2P2 P2 = 35 - 0.5Q2
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Q: Consider the case where there is a consumer in the market with a demand of P = 60 - 2q. A monopolist…
A:
Q: Suppose that a monopolist has a constant marginal cost curve. That is, for each unit of output that…
A: Solution: The profit maximizing choice for the monopoly will be to produce at the quantity where…
Q: A monopolist is selling sneakers to students and non-students. The Marginal Cost of an extra pair of…
A: Student Demand: Q1 = 235-P Non-student Demand: Q2 =400-2P Marginal Cost: MC = 9
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- Part A Suppose that the monopolist can produce a good with total cost TC = 24Q. Assume also that hemonopolist sells its goods in two different markets separated by some distance. The demand curves inthe first market and the second market are given by Q1 = 120 - P1/2 and Q2 = 360 - 3P2. If themonopolist can maintain the separation between the two markets, what level of output should beproduced in each market, and what price will prevail in cach market? Why are the two prices different?Verify the Lemer Index for cach market. Part B Suppose a monopoly faces a demand curve by Q = 154 - P/3. The monopolist has two plants. The firsthas a total cost function given by TC1, = 3Q21 and the second plant's total cost function is given byTC2 = 2Q22 How much total output will the monopoly choose to produce and how will it distributethis production between its two factories in order to maximize profits? Find monopolist's profits.Suppose a monopolist faces two groups of consumers. Group 1 has a demand given by P1=50-2Q1 and MR1=50-4Q1. Group 2 has a demand given by P2=40-Q2 and MR2=40-2Q2. The monopolist faces MC=AVC=ATC=$10 regardless of which group he supplies to. We can infer from the demand equations that Group ___ is the inelastic group because the demand is ____ than that of the other group. a. 2; flatter b. 2; steeper c. 1; steeper d. 1; flatterA monopolist book publisher with a constant marginal cost of 2 and no fixed costs sells novels in only two countries. Assume the inverse demand curve in country 1 is given by P1=10-2/3Qand the inverse demand curve in country 2 is given byPW=18-QAssuming book shipments across countries are banned so that price discrimination occurs. What is the equilibrium price and quantity of books sold by the monopolist in country 1?Options are: a)p=1, q=16b) p=1 q=12c) p=4, q=8d)p=6, q=6Continuing to assume price discrimination, what is the equilibrium price and quantity of books sold by the monopolist in country 2?a)p= 4,q=14b)p= 6,q=12c)p= 8,q=10d)p= 10,q=8If book imports are permitted in both countries so that price discrimination is impossible, what is the equilibrium price and quantity sold in the two countries combined?a)p=6,q=20b)p=7,q=20c)p=10,q=8d)p=12,q=6
- A monopolist sells in 2 markets and produces in 1 factory. Although the monopolist can charge difference prices in the two markets, it must sell all units within a market at the same price. a) Suppose this monopolist does not have a marginal cost (MC = 0). If demand in market 1 isX1(p1) = a1 - b1p1 and demand in market 2 is X2(p2) = a2 - b2p2, set up the monopolist's profit maximization problems and solve for the market prices that result in each market. b) Under what conditions on a1, b1, a2, b2 from above will the monopolist not price discriminate? c) If demand in market i, where i = 1 , 2, is instead Xi(pi) = ai pi^(-bi) and the monopolist has some constant marginal cost of c, where c > 0, set up the monopolist's profit maximization problem and solve for the market prices.Consider a monopolist with a demand equation P = 60 - 2Q, where P is the price in dollars and Q is the quantity. The monopolist is able to produce the output with a constant marginal cost of $20 which is equals to the average total cost. Assume that there is no fixed cost. A. If the monopolist practice single pricing, determine the price, quantity, profit, consumer surplus and producer surplus in this market with the aid of a suitable diagram. Appraise the efficiency in this market. B. If the monopolist were to practice perfect price discrimination, determine the quantity, profit, consumer surplus and producer surplus of the monopolist. Appraise the efficiency in this market. C. Consumers and the society are always worse off in a monopolised market compared to a perfectly competitive market. Do you agree? Examine the two (2) market structures and explain with the help of a suitable market diagram.Consider any market that has a demand curve given by: Qd = 240 - 2P. Where Qd is the total quantity demanded in the market, given in millions of units and P is the market price, calculated in monetary units. Imagine that there are 2 Cournot oligopolists operating in this market with Cmg = CVme = 15 and fixed monthly costs equal to 1,400. About this market, ask yourself: a) What is the reaction curve of oligopolists? b) What will be the production of each of the companies? c) What is the selling price practiced by oligopolists? d) What is the profit of each of the oligopolists? e) Imagine that one of the companies managed to implement a process innovation capable of halving its Cmg and CVme, so that they would go from 15 to 7.5. This investment implies an additional monthly expense of $1,800. Discuss the statement: "If this situation occurs, the innovative company will not implement variable cost reduction, as the quantity supplied in the market will increase very little; prices will…
- Consider a monopolist facing the following demand curve (same as the other quiz). P 24 22 20 18 16 14 12 10 8 6 QD 1 2 3 4 5 6 7 8 9 10 But now let's assume that the monopolist has a constant marginal cost of 8 AND a fixed cost of 28. Now let's imagine that the government wants to make this market more efficient by putting a price ceiling on the good. a. Can they make it perfectly efficient? If not, why not? (Assume everything is in the long run here.) b. If they want to make this as efficient as possible, where should they set the price ceiling? Show this on a graph. Identify the quantity, consumer surplus, and dead weight loss if there is one. Make sure to include any additional curves that may have been necessary…Consider a monopolist facing the following demand curve (same as the other quiz). P 24 22 20 18 16 14 12 10 8 6 QD 1 2 3 4 5 6 7 8 9 10 But now let's assume that the monopolist has a constant marginal cost of 8 AND a fixed cost of 28. Now let's imagine that the government wants to make this market more efficient by putting a price ceiling on the good. a. Can they make it perfectly efficient? If not, why not? (Assume everything is in the long run here.) b. If they want to make this as efficient as possible, where should they set the price ceiling? Show this on a graph. Identify the quantity, consumer surplus, and dead weight loss if there is one. Make sure to include any additional curves that may have been necessary…Suppose that a monopolist faces two markets with demand curves given by: D1 (p1 ) = 100 – p1 D2 (p2) = 100 – 2p2 And also assume that the monopolist’s marginal cost is constant at $20 a unit. 1. If the monopolist can price discriminate, what price should the firm charge in each market in order to maximize profits? 2. Suppose the firm cannot price discriminate, what price should it charge?
- Consider a monopolist who is selling his blockbuster drug in two markets where one market is much larger than the other. Suppose the demand in the two markets is given by q1 = 30 − p1 and q2 = 3 − p2 (quantity is measured in millions of complete dosages and price is in your favorite currency) and the marginal cost of production and distribution is roughly the same and equal to 1 per unit (c=1). This problem asks you to compare equilibrium outcomes (prices, quantities, profits, consumer surplus, and consumer surplus per unit of output) when the monopolist can price discriminate across the two markets versus when it must set a uniform price. It then asks you to comment on some recent policy proposals. For each market separately, set up and solve the monopolist’s profit-maximizing problem. Specifically, write down/compute the following. Inverse demand and the profit functions. Equilibrium prices (), quantities () and profits () Consumer surplus () and consumer surplus per unit of…Please no written by hand and no emage Suppose that the monopolist sells its goods for two segments of the population and the demand -2 functions are given by Q₁ 120P₁² and Q₂ = 320P₂³. If the monopolist can produce at AC-MC-6 and can discriminate the prices what are the optimal prices, respectively? $6,$9 $9, $12 $12, $9 $9, $6 =Suppose a monopolist can produce any level of output it wishes at a constant marginal (and average) cost of 5cedis per unit. Assume the monopolistsells its goods in two different markets, separated by some distance. The demand curve in the first market is given by Q1 = 55 − Q1and the demand curve in the second market is given by Q2 = 70 − 2P2. a. If the monopolist decides to charge a single price in the two markets: i. What should this single price be? ii. What will be the total quantity that will be demanded? iii. Find the profit that the monopolist makes by charging a single price.c. Compare the price, quantity, cost, and profit made by the firm under (a), when the firm charges different prices in the two markets and (b) when the firm charges the same price.