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Suppose the demand curve is QD = 500 - p, and the marginal revenuue function is MR = 500 - 2Q. The monopolist has a constant marginal and averge total cost of $50 per unit.

a) Find the monopolist profit-maxmizing output and price.

b) Calculate the monopolist's profit.

c) What is the Lerner Index for this industry?

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019
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Related questions

Suppose we have a Monopolist with the following Demand Curve:

QD = 100 - 10P

Using the Demand curve provided above, convert this into an Inverse Demand curve that is, Solving for P.

Develop the equations for both the Total Revenue Curve, TR, and the Marginal Revenue Curve, MR.

If the Monopolist's Marginal Cost, MC is constant at $5.00, find the Profit Maximizing Quantity and Price in this market.

Your monopoly company exhibits the following costs:

TC=60+6Q+Q2 & MC=6+2Q

And the following market demand and marginal revenue functions:

Qd=598-P; MR=598-2Q

a)Find the profit maximizing level of output for the monopoly

b) At what price does the monopolist sell its good?

c)What are the monopolist profits

d)Is there any dead weight loss in the market?ย 

ย 

Suppose a uniform pricing monopolist's price equation is P(Q) = 120 รขยˆย’ Q; the uniform pricing monopolist's marginal revenue is MR(Q) =120 รขยˆย’ 2Q; the uniform pricing mo- nopolist's total cost is C(Q) = Q2+40+40Q+150; and the uniform pricing monopolist's marginal cost is MC(Q) = 2Q + 40.

a) Solve for the pro t-maximizing (or loss minimizing) quantity (Q*). (b) Solve for the pro t-maximizing (or loss minimizing) price (P*).

(c) Should the uniform pricing monopolist produce Q*? Explain. (d) Does the uniform pricing monopolist make a pro t? Explain.

(e) How much pro t (or loss) does the uniform pricing monopolist make?

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