2. A monopolist can produce any level of output at a constant marginal cost of $5...
A monopolist can produce any level of output at a constant marginal cost of $5 per unit. Assume the monopoly sells its goods in two different markets separated by some distance. The demand curve in the first market is given by q1 = 65 − p1,and the demand curve in the second market is given by q2 = 90 − 2p2. (a) If the monopolist can maintain the separation between the two markets, what level of output should be produced...
4. Suppose a price-maker firm can produce any level of output it wishes at constant average and marginal costs of 5. Assume the firm sells its goods in two different markets separated by distance. The demand curves for the markets are given by y; = 55– P, and y2 = 70–2p2 a. If the firm can maintain the separation between the two markets, what level of output should be produced in each market, and what price would prevail in each...
Suppose a textbook monopoly can produce any level of output at a constant marginal cost of $5. Assume that the monopoly sells its books in two different markets that are separated by some distance. The demand curve in the first market is given by Q1=55-P1 and the demand curve in the second market is given by Q2=70-2P2. 1. What are the optimal quantity and price produced in each market? (1.5 point for Q1, 1.5 point for Q2, 1.5 point for...
A monopolist can produce at a constant average (and marginal) cost of AC MC 5 It faces a market demand curve of Q-71-P Calculate the profit-maximizing price and quantity for this monopolist. Also calculate its profits. The monopoly would produce units of output at a price of (Enter numeric responses using real numbers rounded to two decimal places.) In turn, the monopoly would earn profit of $ Suppose a second firm enters the market. Let Q1 be the output of...
4. A monopolist faces a market demand defined by P 20. There are no fixed costs. 100 (1/5)Q. Her marginal cost is given by MC (a) Graph the market demand, the marginal revenue curve and the marginal cost curve, labeling the intercepts. (5 marks) (b) Calculate the monopolist's profit-maximizing price, output and profit. (5 marks) (c) Suppose that this market can now be divided into two separate markets and the supplier can discriminate between them. The demand curves are given...
2. This question is adapted from our textbook. A monopolist has two segmented markets with demand curves given by P1 = 160 – 91 P2 = 130 – 592 where pı and p2 are the prices charged in each market segment, and qı and q2 are the quantities sold. Its cost function is given by c(q) = 2q2, where q = (1 + 02. Find the monopolist's profit maximising prices p*, pand outputs q*, q* sold in each market.
Price/Cost ($) 7) Monopoly II (6 points) The marginal costs (MC), average variable costs (AVC), and average total costs (ATC) for a monopoly are shown in the figure below. The figure also shows the demand curve (D) and the marginal revenue curve (MR) for this market. 501 ATC AVC a. What is the firm's profit-maximizing level of output? Label this on the graph. b. What price will the monopolist charge for that level of output? Label this on the graph....
Consider a monopolist with the following demand curve: P = 390-29. The monopolist faces MCM = ACM = 30 a) Solve the profit maximizing level of monopoly output, price, and profits. b) Suppose a potential entrant is considering entering, but the monopolist has a cost advantage. The potential entrant faces costs MCPE = ACPE = 40. Assuming the monopolist continues to profit-maximize, solve for the residual demand curve for the entrant. Assume the potential entrant follows the Cournot assumption about...
A monopolist faces a market demand curve given by Q=70-P a. If the monopolist can produce at constant average and marginal costs ofAC-MC-6, what output level will the monopolist choose to maximize profits? What is the price at this output level? What are the monopolist's profits? b. Assume instead that the monopolist has a cost structure where total costs are described by C(Q) = 0.25Q2 - 5Q + 300. With the monopolist facing the same market demand and marginal revenue, what price-quantity combination will be chosen now...
A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and Midwest). Demand and marginal revenue for the two markets are: What are price, output, profits, marginal revenues, and deadweight loss if the monopolist can price discriminate? (round all answers to two decimal places) P1 20-Q1 MR1 20-2Q1 P2 25-2Q2 MR2 = 25 - 4Q2 The monopolist's total cost is C 5+5 (Q1+Q2) In market 1, the price is $ 12.5 and the quantity is...