Log in
Economics
1
answer
0
watching
234
views
5 Jul 2019

Suppose a uniform pricing monopolist's price equation is P(Q) = 120 − Q; the uniform pricing monopolist's marginal revenue is MR(Q) =120 − 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?

Watch
1
answer
0
watching
234
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Trinidad Tremblay
Trinidad TremblayLv2
6 Jul 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Problem 08-09. A monopolist's inverse demand function is P = 150 - 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2.

a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q1 + Q2 = Q) MR(Q) = - Q1 - Q2

b. Determine the profit-maximizing level of output for each facility. Output for facility 1: Output for facility 2.

c. Determine the profit-maximizing price. 

 

In the country of Wiknam, there is only one firm that produces and sells soccer ball. Initially, international trade is prohibited in the country. The following equations describe the monopolist's demand, marginal revenue, total cost and marginal cost: Demand: P = 10 - Q Marginal Revenue: MR = 10 - 2Q Total Cost: TC = 3 + Q + 0.5Q2 Marginal Cost: MC = 1 + Q Q stands for quantity and P is the price measured in Wiknamian dollars.

a) How many soccer balls does the monopolist produce? At what price are they sold? What is the monopolist's profit? Show all your calculations.

b) One day, the King of Wiknam decrees that henceforth, there will be free trade- either imports or exports- of soccer balls at the world price of $6. The firm now becomes a price taker in a competitive market. What happens to the domestic production of soccer balls? What happens to domestic consumption? Does Wiknam export or import soccer balls?

c) Suppose that the world price was not $6, but instead, happens to be exactly the same as the domestic price without trade as determined in part a) above. Would allowing trade change anything for the Wiknamian economy? Explain

A monopolist with total cost function T C = 30Q + Q2 is facing a market demand given by P = 150 - Q. a) What is the optimal quantity and price the monopolist will set on this market? (Q=30, P=120) b) What quantity and price would this firm set if it was to behave competitively? (Q=40, P=110) c) Calculate the price elasticity of demand.

Related Documents

ECO 2023 Lecture Notes - Lecture 13: Marginal Revenue, Perfect Competition, Marginal Cost
tanwasp406
ECO100Y5 Lecture Notes - Lecture 10: Request Price Quotation
cerisegiraffe538
ECO100Y1
Final Exam
Study Guide
ECO100Y1 Exam Solution: Average Cost, Marginal Revenue, Deadweight Loss
maroonbee996

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in