Compare monopoly outcome with perfectly competitive outcome

Reference no: EM13218213

A monopolist faces a demand curve given by: P = 40 -Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production.

A) What quantity should the monopolist produce in order to maximize profit?

B) What price should the monopolist charge in order to maximize profit?

C) How much profit will the monopolist make?

D) What is the deadweight loss created by this monopoly (hint: compare the monopoly outcome with the perfectly competitive outcome).

Reference no: EM13218213

Questions Cloud

What would be partially financed by the seller : a) What is the probability that 35% of them, or less, would be partially financed by the seller b) There is 80% chance that the sample proportion of home sales that would be partially financed by the seller will be bigger than what amount

Explain control and managing information : Analyze the environment, processes, and procedures at your work or school to determine which aspects can be controlled and which cannot be controlled. Explain your rationale.

Linear programming model for this problem : Formulate a linear programming model for this problem. Develop initial solutions using the minimum-cell-cost method and VAM.

Explain approaches to studying authentic leadership similar : How are practical and theoretical approaches to studying authentic leadership similar or different? How do they compare to the teleological and deontological approaches to studying ethical leadership

Compare monopoly outcome with perfectly competitive outcome : A monopolist faces a demand curve given by: P = 40 -Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $2. There are no fixed costs of production.

Determine the maximum raw instantaneous data : Determine the maximum raw instantaneous data rate that can be provided to a single user in EDGE, assuming that a single time slot on a single GSM channel is available.

Explain why the water in bucket rotated in vertical circle : explain why the water in a bucket rotated in a vertical circle does not fall even when it is in inverted position?

How benefit the company and encourage employee loyalty : Propose two scenarios in which high involvement by an organization would benefit the company and encourage employee loyalty

Determine several points on firms demand curve for labor : Suppose a competitive firm can sell its output for $7 per unit. The following table gives the firm's short run production function. Labor Output 0 0 1 15 2 40 3 70 4 86 5 94 6 98 In the table below, you will determine several points on the firm's ..

User Account

All Pages