Price P3 P a O94; P3 O 92: P₂ O 91; Ps. 93; P4. MC O qi; Pi MR 91 9₂ 93 Q4 ATC Refer to Exhibit 10-3. The profit-maximizing monopolist produces units and charges a price of Quantity
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- Assume a monopolist produces rum and knows there are two groups of rum consumers, 1 and 2, with different price elasticities. Group 1 is highly price elastic with E1=-10; Group 2 exhibits a lower price elasticity of E2=-2.5. Assume the company can separate these two groups (e.g., by handing out special ID cards) and can charge two different prices. If P2=$14, how much can it charge to Group 1?Consider any market that has an inverted demand curve given by P = 200-0.6Qd, where P is the market price and Qd is the quantity demanded. Whatever the market structure, it is known that the production of this good takes place through Cmg = CVme= $80.00. Consider that the production of this market can be done by a monopolist company or by two duopolists. If it is a duopoly, the companies will organize themselves as a Stackelberg duopoly and will each have a fixed cost of $1,500.00. If it is a monopoly, this company will have a lot of expenses with licenses with the government, as it is the only one to explore the resource. In this way, your fixed costs would reach $5,000.00. Given this information, evaluate the best balance for this market, from the point of view of consumers.Consider a monopoly operating in two markets, TC(q) = 10q, q1=50 - p1, q2=30 - p2 3.1 Determine the prices, quantities and profit under linear pricing (hint: does the monopoly sell to both segments or only to one, and if so which one) 3.2 Determine the prices, quantities and profits for a 3rd degree discrimination 3.3 Assume that the monopoly is able to identify both types of customers. Determine the equilibrium profit for binomial pricing, Ti(qi) = Ai + pqi
- A 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=6Q45 Assume that Bandai Namco is monopolist that can sell 11 units of its toy output at $13 per unit and 12 units at $12.40 per unit. For Bandai Namco to profitably produce and sell the twelfth unit of output, its marginal cost must be anywhere at or below Multiple Choice $13. $18. $12.40. $5.80. $8.20.Consider a mature maket with a demand given by P=105.4-10Q The cost of production is given by C=10Q For many years this market has been served by a monopolist. How much profit would the firm lose if it is forced to behave as a competitive firm In all your calculations use numbers with 4 decimal places.
- Q15 Assume that Bandai Namco is a monopolist that can sell 10 units of toy output at $5 per unit and 11 units at $4.80 per unit. For Bandai Namco to profitably produce and sell the eleventh unit of output, its marginal cost must be anywhere at or below Multiple Choice $36. $3.20. $5. $2.80. $4.80.Q22 Suppose that Aurora Cannabis is a monopolist that can sell 47 units of output at $16 per unit and 48 units at $15.80 per unit. The marginal revenue of the 48th unit of output is Multiple Choice $0.20. $6.40. $54. $15.80. $758.40Suppose that a monopolist supplies a product in two distinct markets, LA and SF. The demand functions for thetwo markets are PLA = 52 – 4QLA and PSF = 70 – 7QSF. The monopolist has a fixed cost of $20 and a constantmarginal cost of $10 per unit.a. If segmenting is feasible, what are the profit-maximizing prices, quantities, and maximized profit?b. If segmenting is NOT feasible, what is the profit-maximizing price, quantity, and maximized profit?c. How much is the difference in total consumer surplus in the two cases? Which case makes consumers better off?
- 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…31) If the market demand elasticity is constant at -3 and a monopolist's MPL = 1.2L-0.5, then the labor demand for the monopoly is A) 0.8PL-0.5. B) 0.4PL-0.5. C) 0.8PL-2. D) 0.4PL-2. 32) Suppose the market demand elasticity is constant at -2, and there are three identical firms in the oligopolistic market. A Cournot firm's MPL = 1.2L-0.5, then the labor demand for a Cournot firm is A) PL-0.5. B) 0.6PL-0.5. C) 0.2PL-2. D) PL-2. 33) If the labor market is competitive, a monopoly output market will result in A) a lower wage than that of a competitive output market. B) a higher wage than that of a competitive output market. C) less labor hired than in a competitive output market. D) more labor hired than in a competitive output market. For the following, please answer "True" or "False" and explain why. 34) If the price of a competitive firm's output increases, the firm responds in the short run by demanding more labor. 35) If the…A telephone company has isolated three distinct demands for its services:Weekdays: Q1=90-0.5P1Holidays: Q2=35-0.25P2Nights: Q3=30-0.2P3TC=25+20Q WHERE Q=Q1+Q2+Q3Show that as a discriminatory monopolist this company will maximize profits by charging the highest price in the market where the price elasticity of demand is lowest, by finding a) the profit maximizing level of outputb)the profit maximizing price and c) the price elasticity of demand in each marketUse Cramer's rule for solving simultaneous equations and the Hessian for the second order conditions
