Equilibrium quantity price and the new monopolys profit

Assignment Help Business Economics

Reference no: EM136729

Q. The world is composed of two economies: the European Union and the United States. One of the European firms has a global monopoly in producing widgets. The fixed costs of this industry are €450 and each additional widget costs €20 to produce.
Demand for the widgets in the United States is given by the equation: Q = 120 - P
1. Determine the price and quantity that will be produced by the monopolist (show your calculations). What is the profit being made?
2. Draw a graph presenting the results you obtained in part 1. Be sure to label all the curves and the intersection points and to display the area corresponding to the economic profit.
3. The US put a specific tariff of €10 on European widgets. Calculate the new equilibrium quantity and price as well as the new Monopoly's profit.
4. On a new graph, show the consumer surplus, the tax revenue and the monopoly's profit after the import tariff.
5. Would it be possible that this measure could improve US aggregate welfare?

Reference no: EM136729

Questions Cloud

The most accurate phylogenetic code is that of linnaeus : Dozens of potato varieties exist, differing from each other in potato-tuber size, skin colour, flesh colour, and shape. One might construct a classification of potatoes based on these morphological traits. Which of these criticisms of such a classifi..

Crowding-out effects and the mpc : How would I find out by how much the price of water needs to be raised to reduce demand by 40% if the price of elasticity is 2.0.

Guidelines of the federal reserve : The two smallest banks have proposed merging. Under the standard merger guidelines of the Federal Reserve and the Justice Department.

Indicate the approximate size of an individual cell : A microscope has a field diameter of 2,000 microns under a total low power magnification of 100 X. This microscope has a 10X power ocular. Given this information, reply the following questions that appear below.

Equilibrium quantity price and the new monopolys profit : The US put a specific tariff of €10 on European widgets. Calculate the new equilibrium quantity and price as well as the new Monopoly's profit.

What percent of the gametes produced : How is variability, diploid, independent assortment, crossing over, out breeding mechanisms, polymorphism, heterozygote superiority, hybrid vigor, clines and ecotypes, protogenes, and gene amplification and Pleiotropy relate.

Workers marginal product : You are using a sample size of 15 for your charting purposes. Which of the following is the upper control limit D4 factor for the chart.

Rashid''s budget constraint : Explain why monopolistically competitive firms frequently prefer nonprice competition to price competition.

Substantive responses use theory : Substantive responses use theory, research, and experience or examples to support ideas and further the class knowledge on the discussion topic.

User Account

All Pages