QUESTION 18 Suppose Latte Larry’s successfully eliminates their rival Mocha Joe’s so that Latte Larry’s is...
QUESTION 18
Suppose Latte Larry’s successfully eliminates their rival Mocha Joe’s so that Latte Larry’s is now a coffee monopolist. Let Latte Larry’s cost function be C(q) = 2q and the inverse demand for coffee be p(q) = 20 − 0.5q.
What is the profit-maximizing price that Larry will choose?
I got P = 5 ?
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QUESTION 18
Suppose Latte Larry’s successfully eliminates their rival Mocha
Joe’s so that Latte Larry’s is...
a. Suppose Latte Larry’s successfully eliminates their rival Mocha Joe’s so that Latte Larry’s is now...
a. Suppose Latte Larry’s successfully eliminates their rival Mocha Joe’s so that Latte Larry’s is now a coffee monopolist. Let Latte Larry’s cost function be C(q) = 2q and the inverse demand for coffee be p(q) = 20 − 0.5q. What is the profit-maximizing price that Larry will choose? b. Suppose Latte Larry’s successfully eliminates their rival Mocha Joe’s so that Latte Larry’s is now a coffee monopolist. Let Latte Larry’s cost function be C(q) = 2q and the inverse...
Suppose Latte Larry's successfully eliminates their rival Mocha Joe's so that Latte Larry's is now a...
Suppose Latte Larry's successfully eliminates their rival Mocha Joe's so that Latte Larry's is now a coffee monopolist. Let Latte Larry's cost function be C(q) = 2q and the inverse demand for coffee be p(q) = 20 -0.49. Using the profit-maximizing price you found in the previous question, calculate the deadweight loss in the market as a result of Larry's monopoly. You will certainly find it helpful to draw a diagram to assist in calculating this number.
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q....
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
Q1) Suppose that American Borax is a monopolist and that the worldwide demand for borax is...
Q1) Suppose that American Borax is a monopolist and that the worldwide demand for borax is Q= 100-P where Q is tons of borax and P is the price per ton. The total cost function for American Borax is TC= 10Q+ 0.5Q^2. .a. Write out the firm's total revenue as a function of Q. b. Over what range of output is the revenue increasing? c. What is the profit function for American Borax? d. Find the firm's profit-maximizing quantity by...
Suppose that a monopoly faces inverse market demand function as P = 70−2Q, and its marginal...
Suppose that a monopoly faces inverse market demand function as P = 70−2Q, and its marginal cost function is MC = 40 – Q. Please answer the following two questions: a. What should be the monopoly’s profit-maximizing output? b. What is the monopoly’s price?
PC Connection and CDW are two online retailers that compete in an Internet market for digital...
PC Connection and CDW are two online retailers that compete in an Internet market for digital cameras. While the products they sell are similar, the firms attempt to differentiate themselves through their service policies. Over the last couple of months, PC Connection has matched CDW’s price cuts, but has not matched its price increases. Suppose that when PC Connection matches CDW’s price changes, the inverse demand curve for CDW’s cameras is given by P = 1,225 - 2Q. When it...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is average weekly household income, and that the firm's marginal cost function is given by MC(Q) 2Q. The firm has no fixed costs. = (a) If the average weekly household income is $600, find the firm's marginal revenue function. (b) What is the firm's profit-maximizing quantity of output? At what price will the firm sell that output? What will the firm's marginal cost be? (c)...
A monopolist has a cost function given by c(y) = y and faces an inverse demand...
A monopolist has a cost function given by c(y) = y and faces an inverse demand curve given by P(y) = 156.00 - y, where P is the per-unit price and y is the quantity of output sold. Assume this monopolist cannot discriminate and charges a single price. What is the profit-maximizing level of output? What is its profit-maximizing price? $ Part 2 (2 points) See Hint Assume you want to choose a price ceiling for this monopolist so as...
i just need the answer for "e". Problem 1 (4 points) Knope Industries is a firm...
i
just need the answer for "e".
Problem 1 (4 points) Knope Industries is a firm that produces miniature model souvenirs with total cost function TC(Q) = 2500 + 50Q +0.02Q2 (e) Sketch a graph with the demand curve, marginal revenue curve, and marginal cost curve, and label the profit-maximizing price and quantity. (1 pt) Problem 1 (4 points) Knope Industries is a firm that produces miniature model souvenirs with total cost function TCQ) = 2500+ 500+ 0.02Q (a) Write...
. Suppose TC 10+0.12, MC0.2q. If p 10, the firm's profit on the perfectly competitive market...
. Suppose TC 10+0.12, MC0.2q. If p 10, the firm's profit on the perfectly competitive market in the short run will be (a) 240 (b) 250 (c) 260 (d) -10 because the firm will shut down. (e) None of the above 4. Dayna's Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is TC = 100-5q+q2, MC = 2q-5, and the demand function is Q = 55-p (inverse demand is p 55 Q). What price should DD...
Suppose Latte Larry's successfully eliminates their rival Mocha Joe's so that Latte Larry's is now a coffee monopolist. Let Latte Larry's cost function be C(q) = 2q and the inverse demand for coffee be p(q) = 20 -0.49. Using the profit-maximizing price you found in the previous question, calculate the deadweight loss in the market as a result of Larry's monopoly. You will certainly find it helpful to draw a diagram to assist in calculating this number.
Practice Question 4. The inverse demand curve a monopoly faces is p = 30 – Q. The firm's total cost function is C(Q) = 0.5Q² and thus marginal cost function is MC(Q) = Q. (a) Determine the monopoly quantity, price and profit, and calculate the CS, PS and social welfare under the monopoly. (b) Determine the socially optimal outcome and calculate the CS, PS and social welfare under the social optimum. (c) Calculate the deadweight loss due to the monopolist...
1. Suppose that a single-price monopolist faces the demand function P 100 Q where I is average weekly household income, and that the firm's marginal cost function is given by MC(Q) 2Q. The firm has no fixed costs. = (a) If the average weekly household income is $600, find the firm's marginal revenue function. (b) What is the firm's profit-maximizing quantity of output? At what price will the firm sell that output? What will the firm's marginal cost be? (c)...
A monopolist has a cost function given by c(y) = y and faces an inverse demand curve given by P(y) = 156.00 - y, where P is the per-unit price and y is the quantity of output sold. Assume this monopolist cannot discriminate and charges a single price. What is the profit-maximizing level of output? What is its profit-maximizing price? $ Part 2 (2 points) See Hint Assume you want to choose a price ceiling for this monopolist so as...
i
just need the answer for "e".
Problem 1 (4 points) Knope Industries is a firm that produces miniature model souvenirs with total cost function TC(Q) = 2500 + 50Q +0.02Q2 (e) Sketch a graph with the demand curve, marginal revenue curve, and marginal cost curve, and label the profit-maximizing price and quantity. (1 pt) Problem 1 (4 points) Knope Industries is a firm that produces miniature model souvenirs with total cost function TCQ) = 2500+ 500+ 0.02Q (a) Write...
. Suppose TC 10+0.12, MC0.2q. If p 10, the firm's profit on the perfectly competitive market in the short run will be (a) 240 (b) 250 (c) 260 (d) -10 because the firm will shut down. (e) None of the above 4. Dayna's Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is TC = 100-5q+q2, MC = 2q-5, and the demand function is Q = 55-p (inverse demand is p 55 Q). What price should DD...
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