If, in a monopoly market, the demand for a product is p = 195 − 0.10x and the revenue function is R = px, where x is the number of units sold, what price will maximize revenue? (
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- A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 - Q. What is the profit under monopoly?If, in a monopoly market, the demand function for a product is p = 195 − 0.80x and the revenue function is R = px, where x is the number of units sold and p is the price per unit, what price will maximize revenue?$If a monopoly's inverse demand curve is p(Q) = 18 – 2Q and its cost function is C(Q) = 10 + 3Q + 0.5Q, what is Q* maximizes the monopoly's profit (or minimizes its loss)? At Q*, what is the price and the profit? Should the monopoly operate or shut down?
- Suppose a monopoly firm has the following Cost and Demand functions: TC=Q2 P=80-Q MC=2Q MR=80-2Q Carefully explain what the firm is doing and why. Find the firm’s Profit maximizing Q Find the firm’s Profit maximizing P. Find the firm’s Profit. Suppose because of an advertising campaign, which costs $500, the monopoly’s demand curve is: P=100-Q so its MR= 100-2Q. MC=2Q Looking closely at the TC function and the demand curve, explain the effects of the advertising campaign on the equations compared with the equations above in part 1. Find the firm’s Profit maximizing Q Find the firm’s Profit maximizing P. Find the firm’s Profit. Was the advertising campaign successful? Compare 2 w/ 1. Why?You are the manager of a Monopoly firm, and your demand function is determined by P = 30 - 20 and TC = 10 + 3Q2. a. What is the price-quantity combination that maximizes the firm's profit? b. Calculate the maximum profit!You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250- 4Q, and your cost function is TC = 10Q. A. MC is fixed and is equal to $10 (MC=AC=S). MR=250-8Q. (P=price, Q=quantity of output, TC=total cost, MC=marginal cost, MR=marginal revenue, S=supply) What price the company should choose to get maximum profit if the company will use ordinary pricing strategy? Now suppose the company is thinking about using price discrimination for lower income group of customers. If the company will offer discount of $30 in price to the lower income groups how much additional profit will the company earn? Illustrate graphically. Explain the conditions needed to apply the price discrimination strategy?
- You are the manager of a monopoly. A typical consumer’s inverse demand function for your firm’s product is P = 250 − 40Q, and your cost function is C(Q) = 10Q. a. Determine the optimal two-part pricing strategy. b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per-unit price?You are the manager of a monopoly, and your demand and cost functions are given by P = 200 − 2Q and C(Q) = 1,400 + 2Q2, respectively. What price–quantity combination maximizes your firm’s profits? Calculate the maximum profits. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination?Graphically show a monopoly firm that currently sells 250 units of output at a price of $60/unit, where the marginal revenue of the 250th unit is $40, the marginal cost of the 250th unit is $50, and the average total cost at 250 units is $60. [Hint: Based on the information given, is the quantity you’re asked to show the profit-maximizing quantity? Think about what has to be true for profit-maximization.] Based on the graph and assuming the firm attempts to profit maximize (and succeeds), what would happen to price, quantity, MR, MC, and ATC? (rise, fall, or stay the same?)
- Demand function for a monopoly is Q=100- 2P. The firm's cost curve is C(Q)=20+10Q. (show all your answers in a figure too, draw them manually) a. What is the profit-maximizing solution? What is the firms' maximum profit? What is the revenue-maximizing solution? b. What is the Lerner index at profit maximizing quantity? c. Calculate the deadweight loss if the monopoly charges the profit-maximizing price. d. How does charging the monopoly a specific tax for t = $15 per unit affect price and quantity and the welfare of consumers, the monopoly, and society (where society's welfare includes the tax revenue)? What is the incidence of the tax on consumers?If a monopoly faces an inverse demand curve of p=330-Q, has a constant marginal and average cost of $90, and can perfectly price discriminate, what is its profit? What are the consumer surplus, welfare, and deadweight loss? How would these results change if the firm were a single-price monopoly? Profit from perfect price discrimination () is $ 28800. (Enter your response as a whole number.) Corresponding consumer surplus is (enter your response as whole numbers): welfare is and deadweight loss is CS=$ W = $ DWL = $ AConsider a monopoly with demand P= 7000-Q The cost function for the firm operating in this market is C(Q)-Q2 Find the deadweight loss from this monopoly. Round to the nearest 100th.
