Reference no: EM131244822
Suppose a monopolist faces a demand curve for its output of P = 300−Q. This means that the marginal revenue curve of the monopolist is M R = 300 − 2Q. Assume that the marginal cost of production is constant and equal to $40.
a) Write down an expression for the monopolists profit, as a function of the quantity of output it produces.
b) If the monopolist must charge the same price for all units of output that it sells (that is, if the monopolist is a single price monopolist), what level of output will maximise the monopolists profit? What price will the monopolist charge? What is its level of profit?
c) If this were a competitive market instead of a monopoly, what level of output would be produced and what price would be charged? What is the level of profit for firms if it were perfectly competitive?
d) Draw a diagram of demand, marginal revenue, and marginal cost that illustrates your answer to part b). From this work out consumer surplus and producer surplus.
e) Draw the same diagram but for your answer to c), the case of the competitive market. From this work out consumer surplus and producer surplus. How much deadweight loss is there from the monopoly? Why?
|
Proof read the given paper
: Proof read the given paper. Check the paper for grammar. - The objective of this assignment is to Exploratory Data Analysis (EDA) using Watson Analytics.
|
|
Identify the critical infrastructure sectors
: Identify the Critical Infrastructure Sectors. Choose three of the Sectors and discuss why a certain government agency was identified as the lead agency for that sector. Also discuss what other government agencies you believe should have been inc..
|
|
What is the conversion for a 300 k operating temperature
: For a reactor space time of 10 min, what is the conversion for a 300 K operating temperature? What is the conversion at 500 K? (Remember: the equilibrium constant depends on temperature.)
|
|
What do you think about the notion presented by terris
: What do you think about the notion presented by Terris that Lockheed's ethics program does little to prevent ethical breaches at the highest level of the organization?
|
|
Write down an expression for the monopolists profit
: Suppose a monopolist faces a demand curve for its output of P = 300−Q. This means that the marginal revenue curve of the monopolist is M R = 300 − 2Q. Assume that the marginal cost of production is constant and equal to $40. Write down an expression ..
|
|
How much error is introduced by making this change
: Calculate the exit temperature and τ for the PFR described in Example 9.4.2 when mole change with reaction is ignored (i.e., εB = 0). How much error is introduced by making this change?
|
|
Strategic decision making and enterprise performance
: What can you learn by engaging in an environmental scan that can influence strategic decision making and enterprise performance?
|
|
Use the revenues to reduce income taxes
: Suppose the government decides to impose a tax on gasoline and use the revenues to reduce income taxes in a manner such that consumers' income tax reduction equals the amount of gasoline tax paid. Using indifference curves and budget constraint analy..
|
|
According to the harrod-domar growth model
: According to the Harrod-Domar growth model, if you want your country to grow at 5%, and the capital output ratio is 2: The nation should save what percentage of the nation’s income = What are the problems of relying on the Harrod-Domar model to make ..
|