Please explain the relation between the price and the substitutability of the products in a multi product monopoly with interdependent demand functions.
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- Consider a price discriminating monopoly facing the demand equations and total cost equation below. Market 1: Q1 = 150 – ½P1 Market 2: Q2 = 200 – P2 Total Cost: TC = 100 + 10Q; where Q = Q1 + Q2 a. Calculate for the firms profit and graphically illustrate the resultsb. Calculate and discuss what happens to output, price and profit if the monopoly was unable to maintain the separation between the two marketsGeorge has a monopoly on burrito sales in a small town in Kansas. The burritos cost him a constant $5 each to produce. He faces following demand schedule for his product: Price Quantity Demanded $30 0 $25 1 $20 2 $15 3 $10 4 $5 5 $0 6 Under normal monopoly conditions, how many burritos should he produce, what price should he charge, and how much profit can he expect to make? Draw a graph under these assumptions showing (and calculating) producer surplus, consumer surplus, economic surplus, and deadweight loss. If George could engage in perfect price discrimination, how many burritos would he produce, what would his total revenue be, and how much profit would he earn? Draw a graph under these assumptions showing (and calculating) producer surplus, consumer surplus, economic surplus, and deadweight loss. Is society better off by allowing George to perfectly price discriminate? Defend your answer.Allocative inefficiency is observed in the case of monopoly where economies of scale is absent. Define the allocative inefficiency and present a diagram which shows allocative inefficiency of profit-maximizing monopoly. Compare the price and profit maximization level of output of monopoly to those of a perfectly competitive market. For comparison’s sake, use the assumption that firms in a perfectly competitive industry were bought by a business person and begins to act as a monopoly.
- Why does the monopolist always produce only until that level of output where the own-price elasticity of demand is equal to unity ? Elucidate this either graphically or algebraically↑ If a monopoly faces an inverse demand curve of p=270-Q has a constant marginal and average cost of $90, and can perfectly price discriminate, what is its profit? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination (x) is $ 16.200 (Enter your response as a whole number) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is CS=$ W-s OWL-SAssume that the demand for electric cars is p = 100-q (where q is the quantity and p is the price), and that an innovation can reduce the constant marginal cost of production from 70 to 60. What is the definition of nondrastic/drastic innovation? Confirm that the innovation for electric cars is nondrastic. Show that marginalcost would have to be reduced to less than 40 for theinnovation to bedrastic. Suppose that the industry is a monopoly (not threatened by entry). Howmuch is this firm willing to pay to acquire the innovation?
- Monsanto holds significant regional monopoly power-in some regions they are a true monopoly being the only seller of agriculture seeds. If the elasticities of demand, JEDI, for soybean seeds is 3.5, and 3 for corn, then the profit-maximizing price (relative to marginal cost) for soybeans is times marginal cost, and the price is times marginal cost for corn. Round to one decimal if needed. A Moving to another question will save this response. « >2. Suppose the cost function for a monopoly is given by TC =F+c.q where TC is the total cost, F is the fixed cost and q is the output of the firm. The demand function for the monopoly is given by q = A-bP where A > 0 and b > 0. Find out the profit maximizing price, quantity, and profit for the monopoly. Also find out the expression for the marginal revenue of the monopoly as well as the elasticity of demand facing the monopoly.. Profit maximization and loss minimization BYOB is a monopolist in beer production and distribution in the imaginary economy of Hopsville. Suppose that BYOB cannot price discriminate; that is, it sells its beer at the same price per can to all customers. The following graph shows the marginal cost (MC), marginal revenue (MR), average total cost (ATC), and demand (D) for beer in this market. Place the black point (plus symbol) on the graph to indicate the profit-maximizing price and quantity for BYOB. If BYOB is making a profit, use the green rectangle (triangle symbols) to shade in the area representing its profit. On the other hand, if BYOB is suffering a loss, use the purple rectangle (diamond symbols) to shade in the area representing its loss. Suppose that BYOB charges $2.50 per can. Your friend Clancy says that since BYOB is a monopoly with market power, it should charge a higher price of $3.00 per can because this will increase BYOB’s profit. Complete the…
- In British Columbia, Canada a company named after Tim Hortons runs a monopoly on a sweet snack called Timbits! Suppose the demand for Timbits is P=90-Q and the cost function is C-Q How much would the consumer surplus, producer surplus and DWL be in case Tim Hortons a single-price monopoly? Suppose Tim Hortons could install a device in its premises that could immediately 11) predict the willingness to pay of every unsuspecting customer entering its franchise premises and charge them that corresponding amount! Additionally, suppose they could also stop resale of products, and thus become a first degree price discriminatıng monopoly. How much would the consumer surplus, producer surplus and DWL be in this case?Onestore has monopoly power in Smalltown. Assume that Onestore is a profit maximizing firm and currently operates at a negative economic profit in the short run.(a) Draw a correctly labelled diagram for Onestore and show each of the following:(i) The profit maximizing price and quantity labelled as Pm and Qm respectively (ii) Shade completely, the area representing the negative economic profit (b) Explain why Onestore continues to operate in the short run despite earning negative economic profit in the short run. c. A single price monopolist’s demand curve is given by:P = 240 – 3qand its total cost curve is given byTC = 30 + 6q Calculate the monopolist’s profit maximizing level of output Calculate the profit maximizing price for the monopolist What is the profit of the monopolist?"No firm is completely sheltered from rivals; all firms compete for the consumer dollars. If that is so, then pure monopoly does not exist." Do you agree? Explain. How might you use Chapter 6's concept of cross elasticity of demand to judge whether monopoly exists? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.