Equilibrium quantity, Managerial Economics

Assignment Help:

Consider an industry with a sole producer, a monopolist. The latter faces cost function C(Q)= Q/2 and aggregate (inverse) demand P(Q)=1 - Q (zero for Q> 1). Illustrate all your answers in a drawing

(a) What are the equilibrium quantity QM, price PM, pro?ts ΠM, consumer surplus CSM and total welfare WM for the case of  non-discriminatory (uniform) pricing.

(b) Explain why for effciency, i. e. maximal total welfare, it must be the case that price equals marginal cost. Using this, compute the effcient quantity Q*.

(c) Finally, quantify the social cost arising from the monopoly by calculating the associated deadweight loss, telling you by how much the monopoly industry falls short of effciency.


Related Discussions:- Equilibrium quantity

Explain the role of inflation during inflation and deflation, A. Define inf...

A. Define inflation. Explain the role of inflation during inflation and deflation. B. Managerial economics is a form of economics for managers do you agrees? explain you comment

Explain about long run production function, Q. Explain about Long run produ...

Q. Explain about Long run production function? Long run is a phase adequately long so that all factors together with capital can be changed. The factors that can be increase

Simon satisfying behaviour model, Q. Simon satisfying behaviour model? ...

Q. Simon satisfying behaviour model? The behavioural approach as developed in particular by Richard Cyert and James G. March of the Carnegie School, lays emphasis on explaining

Economics, What limitations are inherent in the economist’s view of pricing...

What limitations are inherent in the economist’s view of pricing?

Discounting principle, Using the discounting principle calculate the presen...

Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. stion..

Econ600, 250 word essay: A New Hampshire resort offers year-round activitie...

250 word essay: A New Hampshire resort offers year-round activities: in winter, skiing and other cold-weather activities; in the summer, golf, tennis, and hiking. The resort’s oper

LIne balancing, what is line balancing for paper machine?

what is line balancing for paper machine?

Public sector borrowing requirement (psbr), PUBLIC SECTOR BORROWING REQUIRE...

PUBLIC SECTOR BORROWING REQUIREMENT (PSBR) Public Sector Borrowing Requirement (PSBR) is the amount which the government needs to borrow in any one year to finance an excess e

Effectiveness of trade unions in developing countries, Effectiveness of Tra...

Effectiveness of Trade Unions in Developing Countries Trade Unions in developing countries tend to be less effective in their wage negotiations with employers than their count

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd