Consider monopoly that faces market demand function

Assignment Help Business Economics

Reference no: EM131194461

Consider a monopoly that faces a market demand function D(p) = 200 − 2p, where p is the price that the monopoly charges, q is the amount demanded by the consumer. The monopoly has constant marginal cost MC = 20. Suppose the monopoly can do perfect price discrimination (namely 1st-degree price discrimination). What’s the maximal profit that the monopoly can make?

Reference no: EM131194461

Questions Cloud

Solve for the equilibrium price and quantity : Suppose that the aggregate supply function for a good is S(P) = 10 + P and the aggregate demand function is D(P) = 40 − P. Suppose that the market for the good is perfectly competitive. Solve for the equilibrium price and quantity.

What is chinese consumers gain or loss : In May 2015, China and Brazil ended a Chinese trade embargo on Brazilian beef in effect since 2012. Brazil’s Agricultural Ministry said it expects to have 26 plants ready to ship meat to China by June, freeing up some $520 million in exports. What is..

Producer surplus at free market equilibrium wage rate : where w is the wage rate, and Ls is quantity of labor suppplied and LD is quantity demanded for labor. Graph the labor demand and supply curve. Calculate the free market equilibrium wage rate and labor demanded and supplied. Calculate consumer surplu..

Culture influences way consumers view different attributes : Explain how culture influences the way consumers view the different attributes of a product. Also, explain how the culture in which individuals are raised has an impact on the products they buy. How can a seller use culture to sell a product successf..

Consider monopoly that faces market demand function : Consider a monopoly that faces a market demand function D(p) = 200 − 2p, where p is the price that the monopoly charges, q is the amount demanded by the consumer. The monopoly has constant marginal cost MC = 20. Suppose the monopoly can do perfect pr..

Consider game that game theory-ultimatum game : Consider a game that game theory people refer to as the “ultimatum game.” We will refer to our two players as the “offerer” and the “decider”. How the game works is that the offerer proposes a way to split $1000 between the two players. Explain which..

What is the dominant strategy : Consider the case of two identical firms, each with a cost function C(yi)=yi^2/1+10yi where i = 1 or 2. These are the only two firms in the market for this good. The market demand is P = -2Q +280. Write the information found in (a) – (c) into a norma..

Economy is in recession with high unemployment-low output : The economy is in recession with high unemployment and low output. What fiscal policy should be pursued in this instance-expansionary or contractionary? What will be the effect of the appropriate policy on aggregate demand?

Optimistic about future business conditions : Suppose firms become very optimistic about future business conditions and invest heavily in new capital equipment. Draw an AD-AS diagram to show the short-run effect of this optimism on the economy. Label the new levels of prices and output.

User Account

All Pages