Total costs for a monopolist are defined as: C(q) = q3 + 1 Hence, marginal costs are: MC(q) = 3q2 If market demand is: P(q)=100 - 10q. a) How much is the monopolist going to produce? b) Provide a graphical representation of your results. c) If the monopolist could discriminate prices perfectly, how would your answers to a) and b) change.
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Total costs for a monopolist are defined as: C(q) = q3 + 1 Hence, marginal costs are:
MC(q) = 3q2 If market demand is: P(q)=100 - 10q.
a) How much is the monopolist going to produce?
b) Provide a graphical representation of your results.
c) If the monopolist could discriminate
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- A monopolist has discovered that the inverse demand function of a person with income Y for the monopolist’s product is P = 0.002Y-Q where P is the price, Y the income, and Q is the output. The monopolist can observe the incomes of its consumers and hence vary its price accordingly. The monopolist has a total cost function C(Q) = 100Q. A. Calculate the profit maximising price as a function of the consumer’s income Y carefully explaining all the steps in the derivation of the formula. B. A monopolist has a constant marginal cost of £2 per unit and no fixed costs. He faces two separate markets in the United States and in the UK. The goods sold in one market are never resold in the other. He sets one price P1 for the US market and another price P2 for the UK market (both measured in £). The demand in the United States is given by Q1=7,000-700P1 and the demand in the UK is given by Q2=1,200-200P1. Calculate the profit maximising output produced and price charged in each country by the…A monopolist sells to two groups of consumers who have demand curves given as follows: q1 (p1) = 100-p1 q2 (p2) = 100-2p2 The monopolist’s marginal cost is constant at $20 per unit, and there are no fixed costs. What price will it charge if it cannot price discriminate? How many units will it sell? Does monopolist prefer to price-discriminate or to apply uniform pricing? Hand written solutions are strictly prohibitedA monopolist knows there are two customers with different demand curves for two differently sized bags of potato chips. Customer S would only buy the small bag and has a willingness-to-pay given by P=160-2q (where P denotes the price and q denotes the quantity). Customer L would buy the large bag and has a willingness-to-pay given by P=200-q. The monopolist does not know who is customer S and who is customer L. Marginal cost of production is zero. AFTER second degree price discrimination, how large are the bags?
- A single-price monopolist faces an inverse demand function of: P(Q,B)=100−Q+B0.5, where Q is the quantity, P is the price, and B is the level of advertising. The marginal cost is a constant $10 per unit, the cost per unit of advertising is $1, and there are no fixed costs. Solve for the firm's profit-maximizing price, quantity, and level of advertising. Hint: the profit function must be maximized with respect to two choice variables (Q and B). The profit-maximizing quantity is -------? units. (round your answer to two decimal places) The profit-maximizing level of advertising is----------? units. (round your answer to two decimal places) The profit-maximizing price is-----? (round your answer to two decimal places)Suppose that a monopolist producing bicycles can divide the aggregate demand into two groups: The domestic market and the foreign market. The demand curve for the monopolist’s product in the domestic market is y1=1200-10p1 and the demand curve for the monopolist’s product in the foreign market is y2=800-10p2. The monopolist’s total cost function is given by C(y)= 50y where y=y1+y2. a)Assume that the monopolist does not practice price discrimination. Calculate his/her profit-maximizing price-quantity combination and the maximum profit. b) Assume that the monopolist practices third-degree price discrimination. Calculate his/her profit-maximizing price-quantity combination and the maximum profit in each market.A monopolist has discovered that the inverse demand function of a person with income Y for the monopolist’s product is P = 0.002Y-Q where P is the price, Y the income, and Q is the output. The monopolist can observe the incomes of its consumers and hence vary its price accordingly. The monopolist has a total cost function C(Q) = 100Q. A monopolist has a constant marginal cost of £2 per unit and no fixed costs. He faces two separate markets in the United States and in the UK. The goods sold in one market are never resold in the other. He sets one price P1 for the US market and another price P2 for the UK market (both measured in £). The demand in the United States is given by Q1=7,000-700P1 and the demand in the UK is given by Q2=1,200-200P2. Calculate the profit maximising output produced and price charged in each country by the price-discriminating monopolist and comment in which country the price charged is higher and by how much. Explain if your answer above is as expected by…
- A monopolist knows there are two customers with different demand curves for two differently sized bags of potato chips. Customer S would only buy the small bag and has a willingness-to-pay given by P=160-2q (where P denotes the price and q denotes the quantity). Customer L would buy the large bag and has a willingness-to-pay given by P=200-q. The monopolist does not know who is customer S and who is customer L. Marginal cost of production is zero. BEFORE second degree price discrimination, and if the monopolist perfectly price discriminated the small bag, what is the price of the small bag?A natural monopolist has the total cost function C(q) = 900 + 25q, where q is its output. The inverse demand function for the monopolist's product is p = 90 - q. Government regulations require this firm to produce a positive amount and to set price equal to average costs. To comply with these requirements (Select all that applies) is impossible for this firm. the firm could produce 5 units. the firm could produce 20 units. the firm could produce 35 units. the firm could produce 45 units. the firm could charge a price of $70. the firm could charge a price of $50. the firm could charge a price of $30.The demand function for a monopolist is given by P1 = 1,450 - 3.5Q and the cost function is C(Q)= 1,200 + 2.8Q^2. However, the new market price is p = $400 Produce a comparative table of P, Q, and profits before and after the new price
- a profit-maximizing monopolist faces the demand curve q=200-5p. it produces at a constant marginal cost of $10 per unit. a quantity tax of $10 per unit is imposed on the monopolist's product which the monopolist should pay. the price of the monopolist's product after the tax. hint: since the conopolist will pay the tax, it increases its cost. you must write the correct cost function to solve the problem.A natural monopolist has the total cost function C(q) = 600 + 10q, where q is its output. The inverse demand function for the monopolist’s product is p = 65 - q. Government regulations require this firm to produce a positive amount and to set price equal to average costs. To comply with these requirements (Select all that applies, there may be more than one answer) a. is impossible for this firm. b. the firm could produce 5 units. c. the firm could produce 15 units. d. the firm could produce 35 units. e. the firm could produce 40 units. f. the firm could charge a price of $70. g. the firm could charge a price of $50. h. the firm could charge a price of $30.Using a graphical approach, once you have found the optimal level of output for the monopolist, how would you find the corresponding price? Group of answer choices From the point of optimal level of output, trace up to the average total cost curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the marginal cost curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the demand curve, and then trace horizontally over to the price axis. From the point of optimal level of output, trace up to the marginal revenue curve, and then trace horizontally over to the price axis