Question 5 Based on market research, a film production company (monopolistically competitive firm) in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P = 1,000 - 10Q Total Revenue: TR = 1,000Q – 10Q2 Marginal Revenue: MR = 1,000 – 20Q Marginal Cost: MC= 100 + 10Q where Q indicates the number of copies sold and P is the price in Ectenian dollars. a. Find the price and quantity that maximize the company's profit. b. Find the price and quantity that would maximize social welfare. c. Calculate the deadweight loss from monopoly.

Question 5 Based on market research, a film production company (monopolistically competitive firm) in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P = 1,000 - 10Q Total Revenue: TR = 1,000Q – 10Q2 Marginal Revenue: MR = 1,000 – 20Q Marginal Cost: MC= 100 + 10Q where Q indicates the number of copies sold and P is the price in Ectenian dollars. a. Find the price and quantity that maximize the company's profit. b. Find the price and quantity that would maximize social welfare. c. Calculate the deadweight loss from monopoly.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 29CTQ: A city has build a bridge over a river and it decides to charge a toll to everyone who crosses. For...

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