What is the usual shape of a marginal revenue curve for a monopolist? Why? 2.When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge? 3.Is a monopolist allocatively efficient? Why or why not?
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1.What is the usual shape of a marginal revenue
curve for a monopolist? Why?
2.When a monopolist identifies its profit-maximizing
quantity of output, how does it decide what price to
charge?
3.Is a monopolist
not?
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Solved in 4 steps with 1 images
- Suppose that a profit-maximizing monopolist faces a demand curve of P = 240 – 4Q, a marginal revenue ofP=240 – 8Q, a marginal cost of 8Q, and an average total cost of 4Q. a. What quantity will the monopolist supply? b. What price will the monopolist charge? c. How much revenue will the monopolist make at the profit maximizing quantity? d. What is the monopolist's total cost at the profit maximizing quantity? e. How much profit will the monopolist make?Give typing answer with explanation and conclusion A monopolist has a demand curve given by P = 88 − Q and a total cost curve given by TC = 34 + Q2. The associated marginal cost curve is MC = 2Q. Suppose the monopolist also has access to a foreign market in which he can sell whatever quantity he chooses at a constant price of 60. How much will he sell in the foreign market? What will his new quantity and price be in the original market?2. A monopolist faces the demand curve p=250-2q and its total cost function is given by TC = F + 10q, where F is a non-negative fixed cost. a. Find the profit-maximising price and quantity produced for the monopolist. b. What is the highest value of F that allows the firm to earn profits (of zero or more) rather than losses?
- Suppose a monopolist’s profit-maximizing output is 200 units per week and that the firm sells its output at a price of $60 per unit. The firm has total costs of $9,000 per week. Assume the monopolist is maximizing its profit and earns $30 per unit from the sale of the last unit produced each week. a. What are the firm's weekly economic profits? $ b. What is the firm's marginal cost? $ c. What is the firm's average total cost?a. Why is a monopolist’s marginal revenue less than the price of its good? Can marginal revenue ever be negative? Explain. b. Draw the demand, marginal-revenue, average total-cost, and marginal-cost curves for a monopolist. Show the profit-maximizing level of output, the profit-maximizing price, and the amount of profit. c. Describe the two problems that arise when regulators tell a natural monopoly that it must set a price equal to marginal cost.2. Assume a monopolist sells a product with a total cost function equal to TC = 400 + Q². The market demand curve for the monopolist's product is P = 500 - Q. A. Find the profit-maximizing output and price for this monopolist. 3. Is the monopoly profitable? By how much? C. Calculate the price elasticity of demand at the monopolist's profit-maximizing price.
- The following table shows the demand for a product produced by a monopolist, who has a constant marginal cost and an average total cost of 45 per unit. Quantity Price per unit 0 120 1 105 2 90 3 75 4 60 5 45 6 30 Calculate the total revenue and marginal revenue for the level of quantity. What are the profit-maximizing output level and price level of the product? In no more than three sentences, explain why. Calculate the monopolist’s profit. Calculate the Lerner Index for this industry.What is the usual shape of a marginal revenuecurve for a monopolist? Why? When a monopolist identifies its profit-maximizingquantity of output, how does it decide what price tocharge?es The following table contains demand and cost data for a monopolist. Complete the table by filling in the columns for total revenue, marginal revenue, and marginal cost. Answer these three questions: (a) What output will the monopolist produce? (b) What price will the monopolist charge? (c) What total profit will the monopolist receive at the profit-maximizing level of output? Quantity Price Total revenue Marginal revenue Total cost Marginal cost O $34 $ 1 32 30 28 26 24 22 20 18 16 14 234 5678 9 10 $ $20 36 46 50 54 56 64 80 100 128 160 $
- 11.2. A monopolist faces a market demand curve given by Q = 70 – P. The monopolist's marginal revenue function is given by MR = 70 – 2Q. a. If the monopolist can produce at constant average and marginal costs of AC = MC = 6, what out put level will the monopolist choose in order to maxi- mize profits? What is the price at this output level? What are the monopolisť's profits? b. Assume instead that the monopolist has a cost structure where total costs are described by TC = 0.25Q² – 5Q+300 %3D and marginal cost is given by МС — 0.5Q —5. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now to maximize profits? What will profits be? c. Assume now that a third cost structure explains the monopolist's position, with total costs given by 11.4. TC = 0.01Q³ – Q² + 45Q+ 100 %3D and marginal costs given by МС — 0.03Q — 2Q+ 45. Again, calculate the monopolisť's price-quantity combination that maximizes profits. What will profits…2. How much output will the monopolist produce? 3. what price will the monopolist charge?A monopolist faces the following demand curve and total cost curve for its product: Demand curve: P = 200 - QTotal cost curve: TC = 20Qa. Write the equation for the total revenue function in terms of Q. b. Write the equation for the marginal revenue function. c. What is the marginal cost? d. What is the profit-maximizing quantity for the monopolist? e. What is the profit maximizing price? f. What is the profit for the monopolist as a result?
