Suppose you are a monopolist and you have two customers, A and B. Each will buy either zero or one unit of the good you produce. A is willing to pay up to $35 for your product; B is willing to pay up to $10. You produce this good at a constant average and marginal cost of $8. If you could not engage in third-degree price discrimination, what price would you charge? OA $10. OB. $15. OC. $35. OD. $45. If you could practice third-degree price discrimination, you will earn a profit of $ (For simplicity, assume that if a consumer is indifferent between buying and not buying, he will buy.)
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- Question 5: Jimmy has a room that overlooks, from some distance, a major league baseball stadium. He decides to rent a telescope for $50 a week and charge his friends and classmates to use it to peep at the game for 30 seconds. He can act as a monopolist for renting out "peeps". For each person who takes a 30 second peep, it costs Jimmy $.20 to clean the eyepiece. Jimmy believes he has the following demand for his service: Price of a Peep $1.20 Quantity of peeps demanded 1.00 90 100 150 200 250 300 70 60 50 350 40 30 400 450 20 10 500 550 a) For each price, calculate the total revenue from selling peeps and themarginal revenue per peep. Price Quantity TR MR $1.20 100 90 100 150 200 70 250 60 300 350 50 40 30 400 450 20 500 10 550 b) At what quantity will Jimmy's profit be maximized? What price will he charge? What will his total profit be? c) Jimmy's landlady complains about all the visitors coming into the building and tells Jimmy to stop selling peeps. Jimmy discovers, though, if he…O OO The above graph shows the market demand function for a product. Assume that the market is served by a perfectly-price-discriminating monopolist with a constant marginal cost of production equal to $4 (MC = $4) and no fixed cost (FC = 0). The deadweight loss equals: DWL - $72 DWL - $0 DWL- -$48 DWL - $84 DWL-$36 $30 $28 $26 $24 $22 $20 Question 23 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1519. Firm A is monopolist in x market, and it consumes one unit of y in order to produce one unit of x. It costs 5 + py TL to produce one unit of x. (py is the price of product y.) y is produced by a monopolist, B, and it costs 5 TL to produce one unitf of y. The demand for x is defined by px = 50-qx (px product price, qx quantity demanded). a) Assume that px is set by Firm A and py is set by Firm B. What would be the equilibrium prices for products x and y? Calculate Firm A and B's profits. b) Assume that Firms A and B merge together. What would be the equilibrium prices for products x and y? Calculate the profits of the new firm. c) Would the merger between A and B increase the consumer surplus? Why (not)?
- Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $40 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. CH Price (dollars per ride) 150 140 130 120 110 100 Quantity (rides per month) 0 1 2345 Total cost (dollars per month) 50 175 310 455 610 775Define price discrimination. Give two examples of price discrimination. How does perfect price discrimination affect consumer surplus, producer surplus and total surplus?A movie production company is planning to make its new movie available online so that it can enjoy monopoly power. Each time the movie is downloaded the production company has to pay 4 taka to the internet service provider. Now it is deciding what price to charge for each download. The numbers below shows the demand schedule for the company, Price per download dollar - 10, 8, 6, 4, 2, 0. Quantity of downloads demands 0, 1, 3, 6, 10, 15. a) Calculate the total revenue and marginal revenue per download. b) To maximize profit what price should be charged and how many downloads would need to be sold?
- Suppose you are a monopolist in the market for a specific Q video game. Your demand curve is given by P = 80- - and 2 your marginal cost curve is MC = Q. Your fixed cost is $400. i) Derive the marginal revenue curve. ii) Calculate the equilibrium price and quantity. iii) What is the profit?Hot Air Balloon Rides is a single-price monopoly. Columns 1 and 2 of the table set out the market demand schedule and columns 2 and 3 set out the total cost schedule. Now suppose that the government places a fixed tax on Hot Air's profit of $50 a month. Calculate Hot Air's new profit-maximizing output and price. When Hot Air is producing its new profit-maximizing output, the number of rides it produces is a month and the profit-maximizing price of a ride is $ >>> Answer to 1 decimal place. C Price (dollars per ride) 180 170 160 150 140 130 Quantity (rides per month) 0 G A WNIO 2 3 4 5 Total cost (dollars per month) 25 150 285 430 585 750Asked Dec 16, 2019 a monopolist finds the demand curve to be linear. with data points (q,p) on that line of being (100,125) and (20,165). How maqny items can he sell if the price is p=90? What price should she charge to maximize revenue?
- A monopoly barber sells haircuts to adults for 30 and A monopoly barber sells haircuts to adults for $30 and to children for $10. Let ηΑ represent adults’ elasticity of demand for haircuts and let ηC represent children’s elasticity of demand.a. Explain why |ηΑ| and |ηC| must both be greater than 1.b. Find a formula for ηA in terms of ηC.c. What is the largest possible value for |ηΑ|? A monopoly barber sells haircuts to adults for 30 andSeema can sell 10 sweaters for $70 each, 20 sweaters for $60 each, 30 sweaters for $50 each, 40 sweaters for $40 each, and 50 sweaters for $30 each. Her marginal cost of production is constant at $30 for each additional unit (or sweater) produced. If she behaves like a monopolist, what is the number of sweaters she will sell? a. 20 b. 30 c. 40 d. 50Bob, Bill, Ben, and Brad Baxter have just made a documentary movie about their basketball team. They are thinking about making the movie available for download on the internet, and they can act as a single-price monopolist if they choose. Each time the movie is downloaded, their internet service provider charges them a fee of $6. The accompanying table shows the demand schedule for their film. Price of download Quantity of downloads 10 2 3 4. 8 12 20 The marginal revenue per download when price changes from $6 to $4 is 0 3 O-1 O Need more information to tell. O 2 O 0.667