Suppose a certain city has a monopoly cable-television company. This company has total costs TC = 0.25Q2 + 30Q + 70. (Hint: using calculus, this means MC = 0.5Q+ 30since MC is the derivative of TC with respect to output.) The demand in the community is approximated by the equationQd = 60- P/2(alternatively, you can write the demand equation as Qd = 60–0.5P). Graphically depict the demand curve as well as the marginal cost (MC) curve. If the cable company is free to choose its own pricePm and quantityQm, graphically depictthe monopoly equilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome. Compute and state the exact monopolist equilibrium pricePm and quantityQm that you depicted graphically.
Suppose a certain city has a monopoly cable-television company. This company has total costs TC = 0.25Q2 + 30Q + 70. (Hint: using calculus, this means MC = 0.5Q+ 30since MC is the derivative of TC with respect to output.) The demand in the community is approximated by the equationQd = 60- P/2(alternatively, you can write the demand equation as Qd = 60–0.5P). Graphically depict the demand curve as well as the marginal cost (MC) curve. If the cable company is free to choose its own pricePm and quantityQm, graphically depictthe monopoly equilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome. Compute and state the exact monopolist equilibrium pricePm and quantityQm that you depicted graphically.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Antitrust And Regulation
Section: Chapter Questions
Problem 10SQP
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Suppose a certain city has a
The
- Graphically depict the demand curve as well as the marginal cost (MC) curve.
- If the cable company is free to choose its own
price Pm and quantityQm, graphically depictthe monopolyequilibrium price and quantity. Add any other curve(s) to your diagram that may be required to obtain this outcome. - Compute and state the exact monopolist equilibrium pricePm and quantityQm that you depicted graphically.
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